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Voluntary Repossession


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Any suggestions would be helpful.

If someone voluntarily calls Wells Fargo Bank tells them they cannot afford vehicle any longer and what would the procedure be to return it.  Wells Fargo says it would be a voluntary repossession, then they would take back vehicle, attempt to sell at auction and any balance remaining they did not get from sale would be owed by the Borrower.

Now, Wells Fargo checked out the vehicle & said they probably would get close to what was owed as it was practically brand new & in great condition. The Borrower returned the vehicle April 10, 2014 and it was set for auction on April 22, 2014. They owed $24,000. & it was sold at auction for $21,000.  Wells Fargo called Borrower and told Borrower balance due was $3.000. Borrower was ecstatic and asked if they could pay balance due via debit card over phone. Wells Fargo said wait till paper work came in.  Two weeks later Borrower called Wells Fargo to settle the $3,000. balance due and it was then Wells Fargo said even though Borrower was paying balance off from auction ($24,000 amt. owed - $21,000. sale amount - $3,000. balance due) there was still going to show a Charged Off of $11,740.00. on April 12, 2014.   Borrow said WHAT?!? No! What Charge off?  Balance due was $24,000. it was sold within 12 days, and if Wells Fargo received $21,000. for sale at auction, & Borrower was willing to pay the balance of $3,000. as agreed, where and why and how was there a charge off?  Wells Fargo said that is how they do things & they have to reflect the charge off.  Borrower was fuming saying  NO there should have not been a charge off b/c it was verbally agreed to voluntary repossession and they would pay balance. Now Borrow refuses to pay the balance of $3,000. off unless they erase the charge off, Wells Fargo refuses to erase charge-off.   How the hell-0 can there be a charge off for $11,740.00 in 2 days after giving vehicle back and when vehicle sold 12 days after giving it back & when it was agreed to pay the balance?

Now Borrower has on their credit report Charge Off- $11,740. Balance due $3,000. Wells Fargo said Charge Off will remain on Credit report for 7-10 years even if $3,000. is paid in full.  Doesn't make sense for Borrower to pay Charge-Off b/c it would be senseless as it will show there was a Charge-Off that never should have been.

How is this fair and is there anything that can be done b/c there should never have been a charge off and it was never agreed to.  Is there anything Borrower can do to get this Charge-Off their credit report?

Thanks for any advice.

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47 minutes ago, Just Me Asking said:

How is this fair

"Fair" has nothing to do with it.  Fair is where you go to ride amusement rides and eat cotton candy.  The question is what is LEGAL.  

48 minutes ago, Just Me Asking said:

is there anything that can be done b/c there should never have been a charge off and it was never agreed to.

You need to understand:  charge off is an accounting term and whether you agree to it or not they can write off bad debt related to your account and is a charge off and can be reported that way.  

49 minutes ago, Just Me Asking said:

Is there anything Borrower can do to get this Charge-Off their credit report?

If it is being reported accurately probably not.  How far behind were you when you turned the car in?  I would start with a letter to the WF Executive Office asking for a full accounting of the loan/auction and balance along with an explanation of how they came up with that charge off amount.  If they won't explain you have two options:  a CFPB complaint or hiring a lawyer. 

My guess is that there are towing, storage, auction house fees, interest, late fees etc. that are being written off but it may not equal $11k.  Until you have a breakdown of how they calculated this you can't begin to fight it.

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"Fair" Ha ha! gotcha,  I meant Legal.

Borrower was not behind in payments just struggling to make payments and before Borrower was to make payment Borrower decided to call and see what would it entail if Borrower gave back vehicle.

All that was told to Borrower is if voluntary they would save towing, pick up fees, etc. if Borrower dropped it off. Borrower met w/representative and turned car over & was not charged fees for this. Breakdown shows all & total due & owing per receipt $3,000. < (rough estimate I'm posting here)

Then after sale, not before agreeing to drop it off nor anytime before sale was Borrower advised there would be a Charge off.  Borrower noted date of charge-off was 2 days after Borrower turned it over & 10 days before sale no where on breakdown of receipt did it say anything about a charge-off.

How can it be legal to just throw a charge-off on an account when it was never discussed and payments were not behind. Although there was a verbal agreement to turn over & pay balance, at no time was a charge off on account was ever discussed or mentioned. Now the Borrower cannot buy another inexpensive vehicle as dealers all tell Borrower, that Borrower's credit is shot w/the $11,740. charge-off on credit report.

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35 minutes ago, Just Me Asking said:

How can it be legal to just throw a charge-off on an account when it was never discussed and payments were not behind. Although there was a verbal agreement to turn over & pay balance, at no time was a charge off on account was ever discussed or mentioned.

Because they don't have to explain accounting to you.  Nor do they need your agreement to charge off bad debt and classify it that way.  You are going to have to get a breakdown on this loan.  WHEN did you buy the car and at what interest rate?  How long had you been paying when you turned it over?  My suggestion is to call an accountant or consumer attorney and ask how this happens.  If it isn't legal the consumer attorney may take the case on contingency.  Go to www.consumeradvocates.org to find one.

 

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Did the person get in writing what the deficiency balance would be before the auction when the deal was made? I bet not because There is no way to know what the deficiency balance would be until all is said and done. Without anything in writing, this becomes a he said/she said case and the banks usually prevail in such a case.

In any case, you should try to get an accounting on how they reached the $11,000 mark but I bet here is what is going to be shown in the accounting:

  1. Even in a voluntary repo, there are still storage fees, auction fees, towing/driver fees, and government paperwork fees to get the car from the bank/dealer lot to the auction lot. No one works for free and each one of them will take a bite. $50 here, $100 there and it soon adds up.
  2. Did the vehicle really fetch $21,000 at auction? Someone could say that is what happened but you will not know until the actual auction occurs. I would almost bet the vehicle fetched less than the auction amount.

Even if you got the settlement amount in writing, the bank is allowed to put on your credit report what really happened. Therefore, if they did take an $11,000 hit, that is what they are allowed to report, not the $3000 settlement.

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The question that comes to my mind is, why would they take an $11K hit like this?  if the customer voluntarily turned the car back in and agreed to pay what was left over of the balance, why would they toss out a $3K number right out of the gate, and take an $11K loss like this?  That does not seem right.  They are in the business of making money.  So why would they do the exact opposite of make money like that, when the customer appears to not have made any attempt to fight the issue?  They tell the borrower that the car will be sold, and the borrower will be on the hook for the remaining balance.  So what would cause them to not pursue the remaining balance like that?  I don't see how that makes any sense at all.  Usually, these companies want to get paid every penny they can get, right?

Wheels up,

Stick

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