Ratrace

Bank refused short sale- now reporting loan as a charge-off

5 posts in this topic

In 2014, we found a buyer for our home but the bank refused a short sale and insisted we sign for a loan for the remainder. We did not receive copies of loan papers nor do we ever receive a statement from the bank and yet we have never missed a monthly payment. Now we find out they are reporting to the credit agency that this account is a "charge-off". Am I missing something?  We had discussed bankruptcy but wanted to try and avoid it if at all possible- if they are going to report it as a charge-off, we are ready to stop making payments and bankrupt this loan. 

 

Any thoughts or advice would be greatly appreciated!

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1 hour ago, Ratrace said:

 insisted we sign for a loan for the remainder. We did not receive copies of loan papers

So you did or did not open the loan?

1 hour ago, Ratrace said:

we have never missed a monthly payment

Payment on the loan or the original mortgage?

1 hour ago, Ratrace said:

nor do we ever receive a statement from the bank and yet we have never missed a monthly payment.

Monthly payment on the mortgage or the loan?  If the loan, and if you never got a statement, how did you know how much to pay and where to send the payments?

1 hour ago, Ratrace said:

they are reporting to the credit agency that this account is a "charge-off".

Which account are they reporting as a charge-off?  The original mortgage or the loan?

What was the total balance owed?  What did the home sell for?  What was the amount of the loan they wanted you to open?

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We did sign loan papers for the remaining balance. 

We have not missed a payment on the loan for the shortfall after the sale of the house.  

We have never gotten statements or notices for the loan. We just send them the amount that we were told when we in and signed the loan papers. 

They are reporting the loan as a "bad debt/charge off". 

 

 

We owed $475,000 on our house which we were only able to sell for $425,000. The local bank which held the mortgage in-house refused a short sale (they told our attorney bc we were self-employed, they felt we had the money and we "holding back on them" 🙄  So they told us we must pay the difference over the course of the next ten years. We were told it would be a loan, we signed papers and have sent monthly payments for the last two years. Now a month ago, the bank starts reporting it as a charge-off/bad debt and when we questioned it, that said they are reporting it correctly? We are so confuse and have a call in to our attorney. If they are reporting it as a charge-off, wouldn't that mean they are receiving no payments? And if so, wouldn't we be better off to bankrupt this loan and be done with them?

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18 hours ago, Ratrace said:

We were told it would be a loan, we signed papers and have sent monthly payments for the last two years.

Do you have a copy of the contract that explicitly says what your payments are?  The only thing I can think is the actual amount is different from what you were 'told' and you have therefore been short every month for the last 2 years, effectively setting you 3 months delinquent.

If you do in fact have a copy of the contract and can prove with your own records (bank statements, etc) that you have paid that amount every month, I would dispute the derogatory info with the CRAs.  If if comes back verified, I would meet with a consumer attorney (http://www.naca.net) about suing them for reporting false info on your credit report.  Statutory damages are limited to $1,000 per incident of false reporting (e.g. 3 months of false reports x 3 CRAs is 9 violations).   If you were to get denied for a loan or had to pay a higher interest rate because of this derogatory info you would also have actual damages, to which there is no statutory cap.  If you managed to accrue $30k-$40k in actual and statutory damages, the bank may reconsider it's position that you've been holding out on them.

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Thank you for the response and I will definitely be contacting a consumer attorney to find out about options!  I have searched back through emails and at no time was it ever indicated that the shortfall amount from the home sale would be reported as "charged off/bad debt".  

 

I also made a list of other information I found by searching through my husband's emails with the bank.  We never received a copy of the contract stating what the payment was or the due date.  My husband has repeatedly asked for two years for a statement or notice and we have yet to receive anything of the sort.  My husband stopped into the bank to put some money into the account we have designated for the monthly payment and was told that no payments had been made in months, WHEN IN FACT, we had not missed a payment but the bank had been putting the money into an escrow account.  We did request a copy of the loan agreement we signed and it appears to be a new loan without any attachment to the short sale of our house.  We to this day have yet to receive a statement/notice/anything telling us the payment, due date, balance, etc. 

 

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