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Debt sent back to original creditor


montaukdoug
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I am in the process of buying a house. In doing so my credit report has been pulled a couple times. In trying to get a mortgage loan, I was told I had to settle a past debt. In July of 2010 I moved from New York to North Carolina. I had setup a date for my cable account to be shut off. It was finally shut off roughly 3 months after I had moved to N.C. In doing so a debt of nearly $500 was obtained. In December of 2011 a collection agency placed the debt on my credit report. The company I am dealing with for the mortgage loan told me I have to settle this debt before I can obtain my loan. In contacting the collection agency I asked for proof that the debt was valid as I had never received a phone call or any mail about the debt. The collection agency simply sent me an attempt to collect the debt. I decided to try to settle the debt for a percentage so I sent a settlement letter to the collection agency and waited for a week with no response. I called them today to see if they had accepted or denied the settlement and they had told me they no longer have possession of the account and it had been returned to the original creditor. They told me that they can't even pull information about the debt. Can I dispute this debt with the credit bureau to have it removed? If so under what circumstances should I list as a reason for it to be deleted? If they sent the account back to the creditor, shouldn't they be able to remove the item from my credit report? What should be my course of action?

Any help is much appreciated.

Doug

Edited by montaukdoug
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yes, you can dispute this debt with the credit bureau. I would point out that you contacted the tradeline without response and include a copy of cmrrr. however, even if they drop it, it could be 30-45 days. you don't usually have that much time if you have made an offer on a house. thats why mortgage co pressure people to pay off any debt, valid or no. If you are just getting pre-approved then you have time to get this done.

Also, it seems like you were negligently overcharged but might owe some reasonable amount. Cable and phone company debts are famous for popping up over and over.

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Assuming the debt is valid (and it seems so from your original post); you need to understand that you still owe the debt and since it was returned to the original creditor you can expect the OC to send it out to a different collection soon. So, you may be successful (and indeed should be) getting the tradeline removed that is being listed by the the "old" CA; it's a good bet that it's going to show up as a new tradeline/new CA very soon.

Were I you, I would go ahead and dispute the tradeline from the old CA but at the same time, contact the OC and try to work a deal so that you can really put this to bed.

EDIT:

I just noticed that you've already been told pretty much the same thing!

Good luck!

Edited by Robert_Nashville
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Maybe you explain the situation to the under writer of the loan via a letter and offer to open a second escrow account with the $500 to show you are willing and able to pay the debt.

yeah, uh no.

look, the mortgage people don't care about fairness or paying what you deserve to pay. any debt on your report, they will ask you to just pay it. that's why it is best to fix this stuff before you are closing.

so if the op is closing then just pay and get them to acknowledge the payment asap.

so it would help to know what stage of "home buying" the op is at.

I hope this post wasn't too snarky, long day two glasses of wine

Edited by cinnamngrl
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