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

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anewme35
Valued Member

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

gdale6 and all, thank you so much for the input, insight and/or guidance!  It helps to have a community out there that has "been there, done that"   I'm going to sleep on it tonight, with every intention of agreeing to the terms tomorrow AM.   Thanks all!

Message 11 of 17
gdale6
Moderator Emeritus

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


@anewme35 wrote:

@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?  


If the account went to CO status then the max its going to be on file is 7.5 years from the DoFD that leads to the CO. Making payments on an account post CO doesnt reset the DoFD as a COed account is always that once its reached it can never again be a paid as agreed account. So if it did reach CO status then the LOs comments are incorrect. If the account never did reach CO and payments resumed then each late will be on file for 7 years from the date they occurred, so if its late now then the account could actually report lates for another 7 years after your final payment.

Message 12 of 17
Anonymous
Not applicable

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


@anewme35 wrote:

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.


I would take him at his word that he is "willing to negotiate". You made an initial offer and he has counteroffered. You can accept that counteroffer, or you can ask for a bit more. I agree with Gdale that you shouldn't let the "settled for less" be a sticking point. However I would, in the spirit of honest negotiation, ask for another six months off the reporting, and see if they will split the difference. If he can't or won't budge further, take what you can get.

Message 13 of 17
anewme35
Valued Member

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

OK,  Thanks again.  I'm think I am taking what I can get at this point.  After me asking to delete again, below you'll find her response.   Question I have is, is there a different between reproting statuses below?  Is one more favorable than the other or are they one in the same?  She switched verbiage on me in this last email, so I just want to be sure.  

 

paid in full for less than the full balance

legally settled in full for less than the full balance

 

 

Her response to me is below.  

 

The proposal to stop reporting at the end of this year is a significant concession on my part, one which we have almost never made. I offered this based on your handling of this situation after charge off. Credit grantors depend on credit reports as accurate credit histories. Your good intent means something to us. However credit reports don’t report your character, and they have strict reporting guidelines for us creditors. The report is a black and white record as to payments received vs. balance owing. In this case that record is that this debt was not paid on time, became a charge off, and then was settled in full for less than the full balance owed. The options are: take our offer of deletion at the end of this year; or leave it as paid in full for less than the full balance for the full reporting period. I’m sorry if you don’t find that sufficient, but it is the best I can offer.

 

 

Message 14 of 17
TRC_WA
Senior Contributor

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


@anewme35 wrote:

 The options are: take our offer of deletion at the end of this year; or leave it as paid in full for less than the full balance for the full reporting period. I’m sorry if you don’t find that sufficient, but it is the best I can offer.

 

 


I think you would be foolish not to take the offer.

FICO8 current as of : ----- EQ: --- TU: --- EX: ---
Hard INQs last 12 months: EQ: 5 | TU: 7 | EX: 9
Verizon Visa $6500 Amex Delta Platinum $10,000 Care Credit $12,000
NFCU CashRewards $6000 Apple Card $2000 Best Buy $3500 Amazon $5000
NFCU auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) $44k new - balance $31k/6.94%
Total CL: $45,000 --- Total CC UTI: --% --- AAoA: 5.5 years --- Income: $200k
Last app: 11-30-23
Message 15 of 17
Anonymous
Not applicable

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

Yup. Take it and run. Sounds like its as far as she is willing to go.

Message 16 of 17
RobertEG
Legendary Contributor

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

I concur.  CR deletion at the endi of the year is huge on an account that has been charged-off, and in which you are settling and they will report settled for less.

 

A few additional observations.....

First, credit report exclusion does not apply to teh OC account, only to individual adverse items reported under the account.

The DOFD only applies to the exclusion of the reported CO.  After 7 years plus 180 days from the DOFD, the CRA must exclude the CO from credit reports they issue.

The account itself does not become excluded or deleted.

 

Second, they are agreeing to stop reportirng, which means only that they will discontinue reporting after the debt becomes satisfied.

That does not state that anything will be deleted.

Cessation of updated reported after satisfaction of the debt is already a requirment of their credit reporting agreement witht the CRAs, and thus is not actually a concession on their part.

 

Thirs, reporting of paid/settled for less is in and of itself something to avoid.

It informs others that the creditor took a loss in dealing with you, as you did not pay the full debt.

It is always a negative in any manual review.

 

 

Message 17 of 17
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