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Hello everyone!! I am new to this boards and I hope I'm posting this in the right place.

Last week I've discovered that I had a lawsuit filed against me by Calvary SPV for some old debt from Citi requesting judgement, I didn't know about it until I started receiving letters from lawyers and went to check on public records. And there it was! I have retained an attorney to deal with it, but meanwhile... I'm in the process of purchasing a house and have closing already set for December 20th. Lawsuit was filed on November 8, I understand this is not a judgement, but if title runs the search,  will they pick up this lawsuit and how will it affect my closing, will I be able to close?? The amount of debt is 30K (it's a long story with my ex, etc...)

I'm really concerned I might not be able to purchase home, even though I was already preapproved. The Citi debt is no longer on my credit report, only this law suit that just popped in at a really bad time. :( 

Should I let my lender/title know about this or what should I do if anything at all?

Any advise would be much appreciated and thank you in advance!

 

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First thing we will need to know is how old is this alleged debt and what was the original amount. If the debt is out of statute, you might be in for a huge payday from Calvary if they end up preventing you from purchasing a home.

What happened was that Calvary periodically pulls credit reports and noticed that you were trying to purchase a house. That is why they filed. They are hoping you will pay them off to purchase the house.

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As noted above, debt buyers get alerted when people try to get mortgages and time their actions for maximum result - when trying to close on a house people tend to be desperate. 

First question - is this an FHA loan?

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Thank you for your reply WhoCares1000 ,  the last payment I can see from the statements that Calvary included is from 09/2010 paid to Citi direct, however, they also included something else that looks like another payment for 100.00 in 2014,  the account number is blacked out, it has my name and address on it, not sure what that is, but it's not a statement from the Citi. If they claim it to be another payment made,  it wasn't made to Citi, possibly made to an original collection agency that Citi sold to, I can't really recall this and I don't know who the original collection agency was. I thought my last payment was to Citi only and not the collection agency.

Calvary provided Bill of Sale claiming that Citi sold my debt to them in 2016, however I'm pretty sure there was another collection agency involved prior to Calvary. I've never heard of Calvary until now. My credit report is not showing any debts to Citi or anyone else for such amount.

 Anyway, my original question still stands, if I should contact my lender and let them know or should I say nothing. I'm not sure what to do Will this lender deny my loan completely? I'm so upset over this :( 

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10 minutes ago, Goody_Ouchless said:

As noted above, debt buyers get alerted when people try to get mortgages and time their actions for maximum result - when trying to close on a house people tend to be desperate. 

First question - is this an FHA loan?

Hi Goody-Ouchless, thank you for replying, this is conventional loan

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OK. That pretty much depends on lender. Some will look at big picture, others want everything paid off. Best to check with lender now so you don't get surprised again.

 

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10 minutes ago, Goody_Ouchless said:

OK. That pretty much depends on lender. Some will look at big picture, others want everything paid off. Best to check with lender now so you don't get surprised again.

 

Ok, I guess I will have to let lender know, I was trying to avoid this as much as possible hoping it will not affect my home buying. :(

Thank you again!

 

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2 hours ago, NoFunAtAll said:

the last payment I can see from the statements that Calvary included is from 09/2010 paid to Citi direct, however, they also included something else that looks like another payment for 100.00 in 2014,  the account number is blacked out, it has my name and address on it, not sure what that is, but it's not a statement from the Citi.

It is a fictitious payment that Cavalry has made up to extend that statute of limitations so they can sue you due to the pending closing on the house.  There is a SLIM possibility that it is some sort of credit that Citi applied but that does NOT count as a payment by the consumer towards the SOL.  

To be on the safe side check your bank records for 2014.  A $100 payment should be easy to spot but if you only made one payment and/or did not enter into a consent judgment or payment agreement it does not reset the statute of limitations.

The SOL to sue you on this expired in 2015.  They are 2 years too late.  Get a Consumer Attorney to sue them NOW for the FDCPA violation(s).  @LawKitty is a REALLY good FL attorney to contact about this.

@Harry Seaward THIS is the kind of mystery payment I was referring to in the other thread.  These JDBs make a ledger entry like this up.  The goal here is not to go to court but to [expletive] up the OPs closing on the house and force some sort of settlement out of them so they can close.  Cavalry knows that the underwriters will most likely not close the loan and home purchase with a $30k suit pending.  That alleged payment resetting the SOL doesn't have to be proven to anyone if they can cause a consumer to panic and settle.  Most don't even know to challenge it.  

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It's not a judgment yet so you legally owe nothing. Given where you are I  the process, I wouldn't say anything.  First,  I honestly doubt title would pick it up. I had two judgments and only the one that had been recorded with the county recorder showed up in the title search. Second, saying something now doesn't help anything.

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3 minutes ago, Clydesmom said:

It is a fictitious payment that Cavalry has made up to extend that statute of limitations

Very unlikely. Big JDBs don't mess around with this nonsense anymore. To much risk for no gain. (They don't need to make up fictitious payments to get a default judgment.)

Much more likely OP made a payment, since he said he doesn't remember if he did it not. 

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37 minutes ago, Clydesmom said:

It is a fictitious payment that Cavalry has made up to extend that statute of limitations so they can sue you due to the pending closing on the house.  There is a SLIM possibility that it is some sort of credit that Citi applied but that does NOT count as a payment by the consumer towards the SOL.  

To be on the safe side check your bank records for 2014.  A $100 payment should be easy to spot but if you only made one payment and/or did not enter into a consent judgment or payment agreement it does not reset the statute of limitations.

The SOL to sue you on this expired in 2015.  They are 2 years too late.  Get a Consumer Attorney to sue them NOW for the FDCPA violation(s).  @LawKitty is a REALLY good FL attorney to contact about this.

@Harry Seaward THIS is the kind of mystery payment I was referring to in the other thread.  These JDBs make a ledger entry like this up.  The goal here is not to go to court but to [expletive] up the OPs closing on the house and force some sort of settlement out of them so they can close.  Cavalry knows that the underwriters will most likely not close the loan and home purchase with a $30k suit pending.  That alleged payment resetting the SOL doesn't have to be proven to anyone if they can cause a consumer to panic and settle.  Most don't even know to challenge it.  

Thank you Clydesmom for your reply. I do not recall any payments made to anyone outside of paying Citi directly, so I need some type of proof that Calvary indeed received a payment (or whomever else did). Should they provide bank account number/ check # whatever to proof the payment? If they can't, then the last payment on record should be from 2010. I checked my account number and I didn't see anything coming out for 100, but it could have been another account that I no longer have? I have no clue...

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36 minutes ago, Harry Seaward said:

Very unlikely. Big JDBs don't mess around with this nonsense anymore. To much risk for no gain. (They don't need to make up fictitious payments to get a default judgment.)

Much more likely OP made a payment, since he said he doesn't remember if he did it not. 

Thank you Herry, i'll just have to wait if Calvary can provide proof of payment, that's all I can do. And I am a she :)

Also, if payment indeed was made, what does it mean in terms of my chances of not getting judgement?

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If you made a payment in 2014, the SOL clock was restarted on that date, so they have another 6 (or whatever) years to sue you from that date.

Did you look to see if cavalry placed an entry on your credit reports yet? 

6 minutes ago, NoFunAtAll said:

And I am a she

My apologies 😀

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8 minutes ago, Harry Seaward said:

If you made a payment in 2014, the SOL clock was restarted on that date, so they have another 6 (or whatever) years to sue you from that date.

Did you look to see if cavalry placed an entry on your credit reports yet? 

My apologies 😀

I have no clue, do I need to pull my credit now? It wasn't there when my lender pulled credit at the end of October.

Apologies accepted :)

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45 minutes ago, Harry Seaward said:

It's not a judgment yet so you legally owe nothing. Given where you are I  the process, I wouldn't say anything.  First,  I honestly doubt title would pick it up. I had two judgments and only the one that had been recorded with the county recorder showed up in the title search. Second, saying something now doesn't help anything.

Ok, but doesn't lender/UW run some type of public record search and see there is a lawsuit? That's the only concern that I have. I don't want my loan to be denied 10 days before closing. :( I understand that each lender is different and I don't know what this particular lender policy is, i'm afraid to say/not to say something. Good lord, it's like damn if you do/damn if you don't....

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I would not say anything at this point and see if they say something to you. As others have said, only judgements end up on credit records. When someone sues you, it is only alleged that you owe the debt. In fact, they have not even served you (or have you been served?) so there is really nothing other than a case filed in court and I doubt the banks go through the local case listings looking for your name, especially since there could be 2 people in the same county with the same name. In fact, the more I think about it, the more likely you are going to close before there is even a chance to serve you let alone get a judgement.

As for the payment, I doubt it is a real payment unless you ex made the payment. A payment would have also reset the credit reporting SOL and I am sure they would have put this back on your reports had a payment been made in 2014 and that would have barred you from even getting a mortgage to begin with. If you have a real consumer attorney, they should call Calvary and inform them that if they do not drop this suit quickly, they will find themselves in a world of hurt because if you do lose this house and have any damages, you can sue for those under actual damages under the FDCPA.

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I can just tell you from personal experience that this same thing happened to us (Midland, not Cavalry, and still within SOL). Everything was in final stages and Midland  suddenly appeared on a credit check (lender seemed to run them quite often, as these loans are often sold before you make first payment.) Anyway, it meant getting another lender at 11th hour (first one required us to settle with Midland in order to fund) and writing letters explaining our prior bad debts, and, yada yada, it scuttled the deal. 

The mystery payment should definitely be pursued. Since Cavalry didn't own debt then, it was probably a third party collector working on Citi's behalf. If you never made a payment in 2014, and this is SOL you get to sue Cavalry for a nice house warming present. If your lawyer is not all over this aspect, I'd suggest finding another one.

Three weeks before closing, and with conventional, you may be OK. FHA has gotten extremely "careful" since housing crash.

 

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1 hour ago, NoFunAtAll said:

Ok, but doesn't lender/UW run some type of public record search and see there is a lawsuit? That's the only concern that I have. I don't want my loan to be denied 10 days before closing. :( I understand that each lender is different and I don't know what this particular lender policy is, i'm afraid to say/not to say something. Good lord, it's like damn if you do/damn if you don't....

Our lender only pulled credit once. He said they can use the same report used for conditional approval to close as long as it's no older than 90 days old.

Whether the loan is denied now or in 5 days, what's the difference?  If you tell them about the law suit, there's a higher chance they will deny the loan vs. never finding out about it on their own.

And here's the other thing.  If title turns up the lawsuit, your lender will be *very* willing to believe you are not the person being sued because they want to close the deal provided there are no other reasons for them to want out. I went through a very similar situation where something came up 2 days before closing. Suffice it to say our lender was satisfied with an affidavit stating that I was not the same person named in the lawsuit and as a result our closing went off without a hitch. The reason is that debt judgments (in AZ, at least) are subordinate to a mortgage, meaning that, even in the worst case where a judgment creditor puts a lien on the home and you default on the mortgage, the mortgage lender gets all of their money first and whatever is left over is whacked up among any judgment creditors. 

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It's up to the OP to check his records to see if a $100 payment was made in 2014. 

Also, he said. "however, they also included something else that looks like another payment for 100.00 in 2014."  He needs to make sure it's actually showing a payment.

1 hour ago, WhoCares1000 said:

As for the payment, I doubt it is a real payment unless you ex made the payment. A payment would have also reset the credit reporting SOL

A payment would only reset the reporting period if it brought the account back to a current status and then went into default again after that payment.   The new default date would reset the 7-year reporting period.

However, if the account was already charged off, it cannot be brought back to a current status and cannot into default again.

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5 minutes ago, BV80 said:

A payment would only reset the reporting period if it brought the account back to a current status and then went into default again after that payment.

Could this not happen if a payment agreement was made with the JDB?

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16 minutes ago, Harry Seaward said:

Could this not happen if a payment agreement was made with the JDB?

Yes, entering into a new payment agreement in writing with either the OC or JDB would reset the SOL for reporting.  

CITI issued some credits to accounts a few years ago.  Quite a few JDBs have tried to claim these as payments by the consumer that reset the SOL.  First the consumer did not make the payment and a credit from the creditor does not reset the SOL.  Second:  even if the OP did make a $100 payment as I said in my first response unless they entered into a new payment agreement (and defaulted again) or that $100 payment brought the account current it would not reset the SOL.  NO way a single $100 payment brought an account charged off for 3 years or more current.  

I stand by my original statement that Cavalry got notified that the OP had applied for and was approved for a mortgage and has climbed out of the slime trying to make a quick easy buck by messing up their mortgage closing.  I would sue the pants off them for it.

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20 minutes ago, Harry Seaward said:

Could this not happen if a payment agreement was made with the JDB?

No, because the account has already been charged off when a JDB purchases it.

1681c(c):

(c) Running of reporting period

(1) In general

The 7-year period referred to in paragraphs (4) and (6) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

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35 minutes ago, BV80 said:

No, because the account has already been charged off when a JDB purchases it.

I disagree.  Entering into a NEW payment agreement with the assignee of the account would be a new contract with a new account number and would reset the SOL based on the date that agreement was entered into and a payment made or missed.  Several states have laws on the books that do allow for the SOL to be reset only by entering into a new payment agreement.  

It would not reset the OC trade line but the assignee/JDB could create their own new one based on the new contract for payments on the debt.  

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1 hour ago, Clydesmom said:

I disagree.  Entering into a NEW payment agreement with the assignee of the account would be a new contract with a new account number and would reset the SOL based on the date that agreement was entered into and a payment made or missed.  Several states have laws on the books that do allow for the SOL to be reset only by entering into a new payment agreement.  

It would not reset the OC trade line but the assignee/JDB could create their own new one based on the new contract for payments on the debt.  

It doesn't matter that it's a new contract with a new account number.  It doesn't become a new account just because the account number was changed. 

I quoted 1681c(c).  Here's 1681(c)a:

(a) Information excluded from consumer reports  Except as authorized under subsection (b), no consumer reporting agency may make any consumer report containing any of the following items of information:

(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.

Both 1681c(a) and (c) reference "charged to profit and loss".   It's still the same collection account that was charged off.  A charged-off account cannot remain on your CR for more than 7 years.  Therefore, a JDB cannot create a TL with a new DOFD based upon that charged-off account.

The "effective result [of the statute] is a seven and one-half year period from the original delinquency." Gillespie v. Equifax Info. Servs., L.L.C., 484 F.3d 938, 940 (7th Cir. 2007).

From Experian:

Collection Accounts are Removed Based on the Original Delinquency Date

Collection accounts stay on the credit report for seven years from the original delinquency date of the original debt, or the date of the first missed payment after which the account was no longer brought current. You may see both the collection account and the account with your original creditor on the credit report.

The original delinquency date is calculated based on the payment history of the original account. If both the original account and the collection account are appearing on the report, they will both be deleted at the same time.

https://www.experian.com/blogs/ask-experian/how-long-collections-stay-credit-report/

In regard to states that allow for the SOL to be reset only by entering into a new payment agreement, that has to do with those states' SOLs for collection.  It has nothing to do with credit reporting.

 

 

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2 hours ago, WhoCares1000 said:

I would not say anything at this point and see if they say something to you. As others have said, only judgements end up on credit records. When someone sues you, it is only alleged that you owe the debt. In fact, they have not even served you (or have you been served?) so there is really nothing other than a case filed in court and I doubt the banks go through the local case listings looking for your name, especially since there could be 2 people in the same county with the same name. In fact, the more I think about it, the more likely you are going to close before there is even a chance to serve you let alone get a judgement.

As for the payment, I doubt it is a real payment unless you ex made the payment. A payment would have also reset the credit reporting SOL and I am sure they would have put this back on your reports had a payment been made in 2014 and that would have barred you from even getting a mortgage to begin with. If you have a real consumer attorney, they should call Calvary and inform them that if they do not drop this suit quickly, they will find themselves in a world of hurt because if you do lose this house and have any damages, you can sue for those under actual damages under the FDCPA.

Yes, i have been served right before Thanksgiving, how odd is that? Anyway, i do have Atty, i'm watching my case through our county's public records, the only thing i saw is that atty submitted a reply to Calvary's atty stating that debt is violating SOL and that i'm declining debt, etc... I don't know how long this whole thing will take, i hope i can close on the house before anything blows up. 

Also, i thought if i indeed made a payment, wouldn't this debt still show up on my credit? I know for sure that after 7 years debt  would disappear from the report. So i don't know what's happening with this.

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