Collections

[jlock45]

Hello I was advised by my lender that I needed to pay off old collection accounts to Midland Funding LLC and to Portfolio Recovery in order to qualify for a home loan. What I do not understand is why I would need to pay on one that I won the case on. I feel I am throwing away my money as this is over 10k that I am going to have to pay out of my equity at closing to these people. If I am to agree to this I want it in writing and I want it deleted from my account. Can anyone offer me any advice on what I should do or what letter I should have written up because my lender wnats the amounts paid and a zero balance reflected on my report. 

[BV80]

12 minutes ago, jlock45 said:

Hello I was advised by my lender that I needed to pay off old collection accounts to Midland Funding LLC and to Portfolio Recovery in order to qualify for a home loan. What I do not understand is why I would need to pay on one that I won the case on. I feel I am throwing away my money as this is over 10k that I am going to have to pay out of my equity at closing to these people. If I am to agree to this I want it in writing and I want it deleted from my account. Can anyone offer me any advice on what I should do or what letter I should have written up because my lender wnats the amounts paid and a zero balance reflected on my report. 

To help us understand, could you please explain what you mean by "won the case"?

[Goody_Ouchless]

Is this for an FHA loan? I don't know about conventional, but FHA should just add any collection accounts as "potential debt" and see if your debt/income would survive getting judgments on all of them. Basically it's so they can fund loan without you having to pay disputed accounts. If you are seeking conventional financing, I would call another lender. We've found that some are just lazy and want everything paid off, rather than having to document your disputes.

[jlock45]

sure Portfolio hadhired an attorney and they dropped the suit bu without prejudice and I know they can pick it back up but I was told the likelyhood of that was slim to none and it was a small amount. 

 

[jlock45]

@Goody_Ouchless yes iti s a FHA but what did not make sense is we wanted convential but were told our scor was not high enough so we paid off a credit card balance and obtained a score needed and then we were told that our debt to ratio had to be met by us paying these off but two thingsif they are offering smaller amounts why not pay those amountsand ot full amounts if these debts are even owed and then can you do a legal document saying once they are paid they must be deleted off the bureaus? 

 

[Goody_Ouchless]

OK, so FHA did their calculation and said these disputed accounts give you an unacceptable debt/income ratio? In that case, they are correct that paying them off is only options. Settling for less should work - they will still show on CR as "settled for less than full amount," but they won't affect debt/income anymore.

 

[jlock45]

@Goody_Ouchless Thank You! Is there anyway to get them to to remove it completely after it is paid? 

 

[Goody_Ouchless]

I understand that they will report something like "settled for less than full amount." Since credit reporting is one of their most powerful weapons, they all refuse to budge on that point. It shouldn't matter for mortgage, as it will show a zero balance.

 

[BV80]

46 minutes ago, jlock45 said:

sure Portfolio hadhired an attorney and they dropped the suit bu without prejudice and I know they can pick it back up but I was told the likelyhood of that was slim to none and it was a small amount. 

 

Yes, you won the case, but the judge didn't rule that you don't owe the debt.  So, that means it's still owed.

[jlock45]

@Goody_Ouchless Thank You! 

[Clydesmom]

40 minutes ago, jlock45 said:

@Goody_Ouchless Thank You! Is there anyway to get them to to remove it completely after it is paid? 

 

PRA and Midland:  NO.  They both have a hard line stance and do NOT do pay for delete.  Not to mention that now they know (and they DO know) that you want a mortgage no way they will delete.  You may have also hurt your chances to settle for less.  They pay the bureaus for lists of consumers who app for mortgages and compare it to those who owe them.  Once they know you owe they also know the underwriters won't approve you until you deal with them.  The leverage on settling is who has most.  Their knowing you want a mortgage puts the odds on their side not yours.  If you want to settle for less the best tactic is to do so before you app or even pre-app for the mortgage.

 

1 hour ago, jlock45 said:

sure Portfolio hadhired an attorney and they dropped the suit bu without prejudice and I know they can pick it back up but I was told the likelyhood of that was slim to none and it was a small amount. 

 

Unfortunately the court did not rule on the merits of the case.  Had the court ruled you did not owe the debt you could get it deleted that way.  All PRA did was drop the issue but leave the door open for further suit attempts if they wished to.  They usually don't but it doesn't help that they still report.

[jlock45]

@Clydesmom If I were to contact Pra would I contact the attorney that dropped the case or them directly and if this is the route that needs to be taken even though I won this case then how would I approach this phone call to get this to a zero balance even though we are in a disagreement obviously or I would have never fought this case and won.

[Clydesmom]

1 hour ago, jlock45 said:

@Clydesmom If I were to contact Pra would I contact the attorney that dropped the case or them directly and if this is the route that needs to be taken even though I won this case then how would I approach this phone call to get this to a zero balance even though we are in a disagreement obviously or I would have never fought this case and won.

"Win" is a subjective term.  Yes, you won in the sense that they dropped the suit and stopped pursuing collecting.  You did NOT win in that the court did not rule that you do not owe the money.  PRA simply gave up and voluntarily let it go.  There is a big difference.  If the Judge had issued a ruling that you do not owe the debt you could present that court ruling to the bureaus and get a deletion.  PRA voluntarily dismissing is not the same thing.  Their only weapon left is to report to the bitter end knowing you may have to deal with them if you want credit in the future.

The attorney has NO ability to force PRA to show a zero balance.  You would have to negotiate with PRA directly and as I said before they have a hard line policy against it.  Not to mention the dismissed without prejudice.  If the SOL for suit is still alive you risk them deciding heading back to court is worth it.

[jlock45]

@Clydesmom if it were to be paid to a zero balance then regardless they have to provide a receipt that this is paid if this is the route that is chosen? 

[Goody_Ouchless]

Yes - if you pay it off, it's paid off. This is no different than paying off a car loan or an IRS tax bill. The only thing that makes it confusing is some people think Midland/Cavalry/PRA, etc. are criminal organizations that find your paperwork in the garbage and forge bills-of-sale. Or since they buy debts for less than face value one should never pay them. It's that kind of idiocy that gets people judgments.

Treat this like any other bill and you'll be fine.

[jlock45]

@Goody_Ouchless Thank You!

[Harry Seaward]

On 1/23/2018 at 1:44 PM, Clydesmom said:

They pay the bureaus for lists of consumers who app for mortgages

How do you know this goes on?

[WhoCares1000]

10 hours ago, Harry Seaward said:

How do you know this goes on?

CRAs sell lead generation lists such as those apply for a mortgage all of the time. That is how they make their money. Why wouldn't a JDB make uses of such a list knowing that mortgage companies will require payment of the outstanding debt before issuing the mortgage? It would make business sense to be doing this.

[Harry Seaward]

4 hours ago, WhoCares1000 said:

CRAs sell lead generation lists such as those apply for a mortgage all of the time. That is how they make their money. Why wouldn't a JDB make uses of such a list knowing that mortgage companies will require payment of the outstanding debt before issuing the mortgage? It would make business sense to be doing this.

Saying it happens "all of the time" doesn't answer my question.  I don't want to know what you've seen distributed on message boards via Brownian Motion.  I want to know how you know this goes on.  I'm asking because I have pretty solid personal experience to say it doesn't happen.

[Clydesmom]

14 hours ago, Harry Seaward said:

How do you know this goes on?

In addition to what @WhoCares1000 said there is PLENTY of anecdotal evidence of posters on this forum and others who pre-apped for a mortgage and suddenly creditor(s) came out of the wood work to report.  You do not actually believe that is a coincidence do you?  Some are so dirty they wait until they are pretty certain the consumer is likely in the zone to close on the home knowing that if they put a negative trade line in the loan won't close with that reporting.  It forces the consumer to actually pay them to get it dealt with because there isn't time to fight it through the system without risking losing the home.

The bureaus are there for the creditors not the consumer.  If they can sell lists of names to creditors you better believe they are doing it.  It is way too easy to subscribe to a monthly list of consumers who app for mortgages for alleged marketing purposes.  It isn't illegal to also compare it to people they know owe them money.  Happens ALL the time.  It is why sites like this recommend dealing with negatives already reporting before apping so the consumer keeps as much leverage as possible.

[Harry Seaward]

31 minutes ago, Clydesmom said:

PLENTY of anecdotal evidence

This is my point. (Hint: look up the definition of "anecdotal")

32 minutes ago, Clydesmom said:

You do not actually believe that is a coincidence do you?

Yes, I do.  That or people are not reporting what actually happened.  I got two different mortgages over a span of 10 years.  Both times I had dozens of unpaid debts comprising of credit cards, checking accounts, auto loans, medical bills and a mortgage.  If what you are saying has even the remotest possibility of being true ("happens ALL the time"), surely one of those debts would have floated to the surface, yet not a single one ever did.

Now, I had a judgment get 'discovered' at the 11th hour, but the judgment was always there as evidenced by the title report from 30 days prior.  If I were to believe what my mortgage broker tried to tell me, I would think the judgment itself showed up at the last minute. If I had posted that, the common mindset here would have been that the 'appearance' of the judgment was a result of my applying for a mortgage.

Unless you can point me to some fact-based evidence, coincidence or mis-reporting are the only reasonable conclusions for things we see posted that we have zero way of verifying.

 

 

[Clydesmom]

1 minute ago, Harry Seaward said:

This is my point. (Hint: look up the definition of "anecdotal")

Yes, I do.  That or people are not reporting what actually happened.  I got two different mortgages over a span of 10 years.  Both times I had dozens of unpaid debts comprising of credit cards, checking accounts, auto loans, medical bills and a mortgage.  If what you are saying has even the remotest possibility of being true ("happens ALL the time"), surely one of those debts would have floated to the surface, yet not a single one ever did.

Now, I had a judgment get 'discovered' at the 11th hour, but the judgment was always there as evidenced by the title report from 30 days prior.  If I were to believe what my mortgage broker tried to tell me, I would think the judgment itself showed up at the last minute. If I had posted that, the common mindset here would have been that the 'appearance' of the judgment was a result of my applying for a mortgage.

Unless you can point me to some fact-based evidence, coincidence or mis-reporting are the only reasonable conclusions for things we see posted that we have zero way of verifying.

 

 

You do realize your personal experience is nothing more than anecdotal as well.  What you are basically claiming is that because it didn't happen to you it must not be true.  Must be nice to have the world revolve around you.  I trust the law of large numbers more than your individual story.  There is ALWAYS an outlier in any scenario.  Has it occurred to you that you simply got lucky?

[Harry Seaward]

1 minute ago, Clydesmom said:

You do realize your personal experience is nothing more than anecdotal as well.

Yep

1 minute ago, Clydesmom said:

What you are basically claiming is that because it didn't happen to you it must not be true.

No.  I'm asking for some facts to support your assertion that it happens all the time.

1 minute ago, Clydesmom said:

Must be nice to have the world revolve around you.

Most days, yes.  It has it's drawbacks.  I won't bore you with my first world problems, though.

2 minutes ago, Clydesmom said:

I trust the law of large numbers more than your individual story.

My story is an example of large numbers.

3 minutes ago, Clydesmom said:

There is ALWAYS an outlier in any scenario.

"an" outlier, yes.  Not 20 or 30.

4 minutes ago, Clydesmom said:

Has it occurred to you that you simply got lucky?

Not 20 or 30 times, no.

So I can safely assume you have no facts (or even personal experiences) to support your claim of "happens ALL the time" then.

[WhoCares1000]

If you look at the CRA websites, you will see that all 3 sell various products and lists at every stage of the mortgage process from pre-app to those 3 - 5 years into their mortgage (prime refinance group). As @Clydesmom has said, the creditors are their customers and if their customers want a product, the CRAs will make a product for them. So it is not far fetched that such a product would exist.

Now that we have covered the availability of the product, let's look at legality. There we find that as long as they report correctly, what they are reporting and when they do it is perfectly legal. In other words, there is no legal backlash for this as opposed to say, putting a bankrupt debt with a balance on a report and leaving it there waiting for the debtor to need credit.

With legal taken care of, now let's look at motive. Would a subscription to said product and how it can be used (read automation) allow the JDB to make a business decision that doing such an action would be cost effective. The answer is yes, especially for stale debts. Even if they hold the debts for only 3 - 6 months before reselling, quite a bit can happen in that time.

The only reason I can see for not doing this is that they might run into someone that is litigious and more willing to fight than settle. Even if that were true, that would be a very small number.

Since I have outlined availability, legality, and motive as the reason to do such an act, my question to you @Harry Seaward is can you show why a JDB would not purchase mortgage app lists and poison credit reports, other than it did not happen to you.

[Goody_Ouchless]

Are we dealing with Confirmation Bias? The lending process works like any other sales job. Everybody's credit looks "great" when they are a "prospect," as opposed to an actual "customer." If the process actually gets to the last step prior to funding, that "great" credit suddenly becomes problematic.

Consider: Midland owns a debt. Customer approaches lender about a mortgage and is "pre-approved." Customer gets ready to sign papers and gets a call from lender that there's a Midland debt that needs to be addressed. That customer comes here and says "Midland showed up at last minute and wrecked my loan."

Result: Belief that Midland buys a home-buyer list for ambush purposes.

Reality: Midland waits for calls set up by lenders to help debtors "resolve" the situation.

If you think about it logically, what possible benefit does Midland gain from a potential buyer list? For this theory to work, I must have applied for a mortgage on Monday. Wednesday Midland found, vetted and purchased a 20 million dollar portfolio solely because contained one of my debts. On Friday they reported ownership in order to sink my loan.

Granted, that's what I believed when they scuttled my mortgage at the 11th hour. In reality they owned the debt and simply waited for an eventual lender to require it be paid.