I let my house go into foreclosure. It had a first and second mortgage. The 2nd was a HELOC with Citibank but was actually serviced by a company called America Servicing Co. I paid them (America) and they reported to my CR.
After I stopped paying but before the foreclosure, the servicing of the 2nd mortgage got transfered to another company called GreenTree. I didn't understand why this happened unless the 2nd mort got sold or something since I wasn't paying anyway.
A few months later the foreclosure happened.
I checked my credit report today and I have 2 separate tradelines. One from America and one from Greentree. They both say "chargeoff" with the same balance but different account numbers.
Is this permitted? I would think that America should not be chargeoff but rather "transfer" and Greetree should be the "chargeoff". The chargeoff technically happened when Greetree was servinging it. America xfered it before the chargeoff happened.
And just to clarrif Greentree is a servier NOT a collector who bought the bad debt.
The same debt cannot be moved as a receivable asset to a non-receivable bad debt in their accounting ledger by two different parties.
IRS kinda frowns on giving a tax writeoff on the same uncollectible debt to two different taxpayers.
If both are reporting a charge-off taken on their accounts, that is inaccurate.
I would send a direct dispute to the party who did not do the actual charge-off.