Hi, I need some help determining how I need to go about addressing an issue with a second mortgage on a home that had been foreclosed.
Our house was foreclosed Jan 2011. After foreclosure, the 2nd mortgage (balance of approx $30,000) continued to report late every month. My understanding is that this is totally legit as the foreclosure does not eliminate the obligation to pay the 2nd mortgage. Well, in May of this year, Bank of America quit reporting the loan late. It is now reporting as a charged off account. The weird thing, is that it also shows a balance of $1,900. We haven't received any contact from collections, so i'm assuming they haven't sold the loan, and if I understand correctly, it would have to show a $0 balance for someone else to collect on it.
We can afford to pay the $1900, but i'm not sure what, if any impact that would have, so I want to have an idea of what exactly i'm dealing with before I try to contact Bank of America.
I've had one mortgage officer say that we need to get all of the late pays removed and that we should sue Bank of America to do this (again, my understanding is that this is incorrect as they were within their right to continue to report these late pays). Another mortgage officer says we just need to get them to fix it to report charged off with a $0 balance and that we will then be fine to get a mortgage.
Any help or advice would be greatly appreciated. I just don't understand why it is being reported the way it is!
