Bank Reports Paid in Full now seeks deficiency?

[stevemia]

Can the bank change the reporting on my loan or does it actually have any legal strength:

LEGALLY PAID IN FULL FOR LESS THAN FULL BALANCE.

Although it is derogatory, it clearly states PAID IN FULL.

Now, seems bank assigned balance to Oxford and they are hounding me.

Any body familiar with the legality here? How can they pursue me if they reported it 3 months ago as LEGALLY PAID IN FULL FOR LESS THAN FULL BALANCE?

[GrumpyGus]

I need a little more information here.

It sounds like you negotiated a settlement for less then the full value of the debt. If that is true do you have a copy of the settlement agreement? If it is worth its salt it has verbage that says something along the lines of "full satisfaction of the debt".

This means that once you pay the settlement you can't be held liable for the balance.

If you do not have a copy of the agreement or no agreement exists, then if it is a valid debt, they can seek the remainder of the debt. Worse yet, depending on circumstances partial payment of the debt or promise to do so can reset the clock on the SOL.

Whatever your credit report trade line did say, or once said, or accidently said is irrelevant. It is not a binding legal document. It is simply a reporting tool used by businesses and can be reasonably subject to error (and therefore correction).

The bottom line is unless you have a signed document indicating the debt was paid in satisfaction, they can seek the remainder.

It doesn't mean you do not have options though...

[stevemia]

Ok, both my attorney and realtor spoke with bank negotiator. She firmly stated that the bank is issuing no non-deficiency letters.

Attorney tells me to handwrite a statement under my signature on the approval "I am signing this approval with the intention that there will be no pursuit of deficient balance."

Sounds cheesy but a couple of lawyers Ive spoken with claim this is a "unconventional" waiver that I stupiulated and since there was no hesitation by the bank to accept it, that they agreed to the non-deficiency.

Also, the approval letter does not state anywhere that they may pursue a deficiency in the future yet states that this may be considered a forgiveness of debt and will be reported to the IRS as such.

Now that the bank issued satisfaction of mortgage, it seems debt is now unsecured and attorneys also tell me that it is difficult for them to collect. Send validation letter today.