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Calling all Experts - Short Sale Promissory Note Reporting as Late Mortgage


Pumpkin38
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I completed a short sale December 2009 and agreed to a promissory note to cover most of the balance. I fell behind on the promissory note several times and so there are numerous 120 day late notices reporting. I was originally given 5 years to pay the promissory note but I settled in April 2013 ( 1 1/2 years early) in order to move on and get all of this behind me.  Trouble is...this collection agency, Realtime Resolutions, is reporting this unsecured promissory note as a mortgage on my credit report. Their account appears to be a foreclosed mortgage with "settled for less than agreed" notation so I have both my short sale record with B of A reporting as well as this promissory note account which on the surface also appears to be a mortgage.  My credit report shows that I've had 2 foreclosures in 4 years.  Let me be clear - this was an FHA loan with only one mortgage...there was no 2nd mortgage or home equity loan.  I was only $10K short on the short sale and agreed to a $7K promissory note to close.  

 

The Realtime Resolution account has absolutely killed my score for the past 4 years which is also affecting my ability to secure another mortgage.  My credit is spotless with the exception of what appears to be a 2nd foreclosure that closed in April 2013.  I believe this is intentional and malicious and part of their debt collection strategy.  A mortgage late and/or foreclosure is the most damaging notation and they have held me hostage for 4 years. I cannot wait another 3 years to secure a mortgage or any additional credit. 

 

Is it appropriate to report an unsecured promissory note as a separate mortgage? This is not a home equity or second mortgage situation. A pure short sale.

 

Thoughts..advice on next steps. Credit bureau is no help

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I've never heard of this exact situation before, but I would think that even if they reported this as a defaulted installment loan, you would be suffering the same consequences.  Since they are reporting it as a mortgage, I would think this falls under false reporting and I would send them an intent to sue letter to see what they say about it.  

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I've never heard of this exact situation before, but I would think that even if they reported this as a defaulted installment loan, you would be suffering the same consequences.  Since they are reporting it as a mortgage, I would think this falls under false reporting and I would send them an intent to sue letter to see what they say about it.  

 Just a quick update ... I've been doing a little more research and wanted to get your opinion.  I found that Bank of America issued me a 1099-C on January 10, 2010 for the full amount of the deficiency.  Not sure how RTR is able to collect on a debt that was cancelled the day of closing.  The promissory note was signed a full month before closing and I don't think it was part of the final deal because I was negotiating with Bank of America down to the wire.  I ultimately agreed to pay some cash at closing and then received the 1099-C for the remaining balance shortly thereafter.   I believe RTR is trying to collect on a cancelled debt...maybe they were unaware?  Things were a mess in 2009 and short sales were new. I even had multiple negotiators handling my file.  Took 6 months to close.  Can you tell me if a mortgage deficiency debt that was cancelled via a 1099C can be pursued by a collection agency?

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