Trying to prepare for a mortgage loan...need advice with old CO's and CA's.

[TX_to_Cali]

Hi Everyone!

New to the forums and this is my first post, but I have done a lot of reading here and found the posts from everyone extremely valuable.

So here is my situation.

In 2009 we went through a very rough financial time.  We had over $140K in CC debt.  Due to salary cuts and all of my creditors reducing my CC limits at the same time, I was unable to pay the mimimums on all our bills.  I called them all and tried to negotiate reduced payment terms, but only some would agree.  The ones who agreed and helped me out I have been paying on religiously.  The ones who didn't I had to make a hard decision to stop paying them.

So here I am 4 years later and trying to clean up my credit to get a mortgage hopefully within the next year or so.

I have paid off $40K of it over the last 4 years, and have about another year left to finish paying off the last $10K of what I have planned to pay off with the original creditors.

That still left about $90K that was charged off by the original creditors.  About $66K of that I recieved a 1099-c (cancellation of debt) last December, and paid all the taxes on the settled amount in my tax payment for this year.

So the final $24K is with CA, and being reported on my credit reports constantly.  I have recieved settlement offers for about %50 of original balance on these, but they are all outside SOL, now, so I haven't decided what to do about them yet...

So here is where I need advice...I have relatively good credit of about 700 on all 3 bureaus, but I'm not sure how all these charge off's and the 3 remaining CA accounts are going to affect my mortgage loan (OK I know they aren't going to look good, but I need to know what needs cleaning up and by how much?)

Please offer any advice you can.  I would be most grateful.  I would be happy to provide additional details if necessary.

[guiness56]

If they are not paid the lender will more than likely require they are.  It really depends on the lender and how old the debt is.

Are the OCs and CAs both reporting for the same debt?

Does the OC report a balance if they do?

[TX_to_Cali]

Hi Guiness,

Thanks for the fast reply!

When you say "if they are not paid".. do you mean all of the CO's and CA's?  The debt is all 4 years old, but there is no way I am going to be abl to pay off that original $90K that was charged off...so am I SOL?

The charge offs do not show a zero balance, they all show a balance due but accounts are listed as closed/charged off.

And yes the 3 CA's are collecting on the same OC accounts that still show a balance (only they've added interest to the totals...)

Thanks!

[TX_to_Cali]

correction, the CO's do show a zero balance, but show th original amount as "Past Due" on my credit report.

[guiness56]

When an OC reports a 0 balance that means they no longer own the debt.  You would have to work with the CA that owns it.

You would need to talk to a mortgage lender and see what their requirements are as far as debt is concerned.   They may want it paid or settled. 

[TX_to_Cali]

OK Thanks.  I'm really just trying to figure out which items will need to be dealt with and how.  Seems like there is quite a bit of possible variability in that answer.  I will check over in the mortgage forum also.

Thanks for your help.

[Shogun]

     Also, if they are past the SOL, I'd offer a percentage, maybe 20% to settle the debt.  It's worth a try.

[TX_to_Cali]

Thanks Shogun.  I am pretty sure I will have to do some sort of settlement with the 3 that are with CA.  The CA is LVNV so that may be a bit of a challenge from what I've read on these forums.  They already offered 50% settlement but I am thinking of offering a PFD for 25% and see if they counter.

But for the ones that have charged off and sent me a 1099-c...those should be considered settled in the eyes of the mortgage lender right?

Thanks again for your advice.

[Shogun]

     If you got a 1099C then they have written it off their taxes and have gotten credit for it.  They can't collect from you and write it off, so yes, it is done with them.

[rd2rebuilding]

the 1099 covers the 66k... you need to worry about the remaining 24k. I agree with Shogun. I'd lowball with a settlement offer to satisfy the debt since it is out of SOL. Surely, they'd rather get some money. Either way, you will more than likely have to satisfy the unpaid debt before securing a mortgage.