cancel
Showing results for 
Search instead for 
Did you mean: 

Message from Lender as part of our settlement....is this true?

tag
anewme35
Valued Member

Message from Lender as part of our settlement....is this true?

I have a baddie that is currently a charge off.  HELOC taken out against a property that was eventually short sold.  Balance still remained on HELOC, they threatened to sue me 6 years ago, I have made monthly payments in good faith and now want to settle the loan.  We've reached a settlement agreement of $5k.  The point of contention is that I've asked them to discontinue reporting it now as part of our settlement.  The DOFD on this loan is 7/09.  

 

 

My settlement request

 

 

If we meet in the middle from a financial perspective ($5k paid), can we report the account simply as closed or stop reporting (delete) it all together?  July 2009 is the Date of First Delinquency for this account, meaning the account will not be included in my standard credit report or scoring after July 2016.  What I am asking for here is to stop reporting all together as will be the case next year anyhow?  I fully understand the lack of credit reporting next year does not resolve me of the debt and thats why I am still working to find a happy medium. 

 

 

Their response

 

We will accept the settlement offer of $5,000. I am willing to negotiate on the credit bureau reporting as well. We are legally bound to report fairly and  correctly, so I cannot simply report this as paid when the full balance is not paid. We will update the loan with the correct reporting of “legally settled in full for less than the full balance”. I also agree to delete this from your credit bureau at the end of this year, 12/31/15. Your credit will be improved by the legally settled update in the meantime, and again after the deletion.

 

Loans of this nature can actually report for seven years from the date of last payment, not the date of first delinquency. Thus, deleting at the end of this year should still be a significant benefit for you. Please let me know when you intend to make the settlement payment, and confirm your correct current address. I will complete a settlement letter stating these terms, and mail it to you for your file. I am also happy to email the document if you’d prefer.

Message 1 of 17
16 REPLIES 16
firetech593
Regular Contributor

Re: Message from Lender as part of our settlement....is this true?

As far as i  know, 7.5 years from DOFD only counts when there are no payments being made. They can report  for another 7 years since you are paying. So, yes, they are helping you.

Message 2 of 17
anewme35
Valued Member

Re: Message from Lender as part of our settlement....is this true?

Thank you.  I wasn't aware of this.  Its frustrating and feels like every corner I turn there's another gotcha.   Smiley Sad

Message 3 of 17
crrredit
Established Contributor

Re: Message from Lender as part of our settlement....is this true?

Their response seems strange when it goes from "I will do this" to "we will do that"... You don't see a lot of first person pronouns in letters from creditors. Not sure what any of this means...carry on.

Message 4 of 17
anewme35
Valued Member

Re: Message from Lender as part of our settlement....is this true?

Crrredit interesting note.  The only thing I can add is that I had been a long time standing customer of the CU.  Its a very small local CU.  The lady who is now VP of Lending for the credit union is the same lady who worked with me a decade ago to initiate and fund the 2nd loan.  I think her response is speaking on behalf of the credit union as well as what she can "personally" agree to if that makes sense.  My baddie/charge off has never been sold off to a CA.  Its still with the original creditor.  I still remember the day vividly sitting in her office signing the paperwork.  For full context I've pasted my full note and request to her after going back in forth with a Junion loan collection officer.  

 

_______

I understand why it isn't reasonable to report as paid, but what other actions or options available?

 

If we meet in the middle from a financial perspective ($5k paid), can we report the account simply as closed or stop reporting (delete) it all together?  July 2009 is the Date of First Delinquency for this account, meaning the account will not be included in my standard credit report or scoring after July 2016.  What I am asking for here is to stop reporting all together as will be the case next year anyhow?  I fully understand the lack of credit reporting next year does not resolve me of the debt and thats why I am still working to find a happy medium. 

 

A couple of considerations that I hope help with this decision.



I've been a member of the credit union for many years.  In addition to the HELOC loan, I've paid in full an installment auto loan without any late payments  or issues through CFCU. 



I have kept in contact and have always been open and transparent about  my intent to settle this debt.  The 2nd loan provided to me was in excess of the property value at that time in which I took the loan.  Specifically 103% LTV.  I was young and eager to make renovations to the home during one of the worst times historically in the housing industry.  A very poor, under informed and short sighted decision made by me which resulted in a home worth much less than owed.  Certainly a lesson learned.  



I do however want and need to make this right.  The current reporting status has hurt my credit report and scoring now for 6 years.  



The final offer I've proposed above is 68% of the principle balance and will eliminate future overhead and administrative burden on my end and yours by allowing us to put this debt behind us for good.  The only point of contention is the reporting status once settled.  Settled for less than legally owed doeesn't really help.   Please consider no longer reporting the account or reporting as a closed account.  



If you could let me know your final decision ASAP, that would be appreciated.  

 

Message 5 of 17
crrredit
Established Contributor

Re: Message from Lender as part of our settlement....is this true?

Well, the personal factor probably helped you. You're getting a PFD on a settled debt. Just gotta wait a few months for it to happen. 

Message 6 of 17
gdale6
Moderator Emeritus

Re: Message from Lender as part of our settlement....is this true?


@firetech593 wrote:

As far as i  know, 7.5 years from DOFD only counts when there are no payments being made. They can report  for another 7 years since you are paying. So, yes, they are helping you.


Actually for a DoFD to be used in account removal the account has to reach CO status.

Message 7 of 17
anewme35
Valued Member

Re: Message from Lender as part of our settlement....is this true?

Crrredit, ya agreed, thanks for the response.  I'm such a "i want to see the improvement now" type, but (pun intended) thats what got me into this mess to begin with.  Sounds like settling now will satisfy the debt and will eventually help as it will be gone from my CR by the end of this year.  Sounds like I should agree to the terms that she's laid out, pay the bill and move on.  There is a small part inside that is hopeful that she will drop it before 12/31/15....I wonder if I will sour the agreement or deal by now negotiating the date it will stop being reported...for example should I ask for her to meet me halfway on that date?  Instead of 12/31/15 ask for 7/31/15?  

Message 8 of 17
anewme35
Valued Member

Re: Message from Lender as part of our settlement....is this true?


@gdale6 wrote:

@firetech593 wrote:

As far as i  know, 7.5 years from DOFD only counts when there are no payments being made. They can report  for another 7 years since you are paying. So, yes, they are helping you.


Actually for a DoFD to be used in account removal the account has to reach CO status.


gdale6,  are you saying that my lender is incorrect in saying that DofD doesn't matter and that the CO will fall off of my account 7.5 years after my last payment/settlement?  

Message 9 of 17
gdale6
Moderator Emeritus

Re: Message from Lender as part of our settlement....is this true?

OP, I would not let the "legally settle for less than full balance" deter you from settling this account, I did a short sale in 04 and it said this same thing but the account was a positive not a negative. If they are agreeing to settle the balance for 5K and remove it by the end of this year then I would most likely accept their offer.

Message 10 of 17
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.