One more question regarding the new FHA rule on collections

[newme2012]

I have one more question about the new FHA collection rule.  If I do a settlement agreement with the collection company will I still have to go back and pay it completely off or will that satisfy the FHA guideline.  I have collections all totaling more than $1000

Thanks,

Jay

[casmith1980]

My assumption is, if you make a settlement offer with a collection agency - the collection agency will in turn reflect the balance owed to $0 (because in essence, the account is paid off in full.)  The only connotation they may add to your report is "settled for an amount less than owed" but the amount will still reflect as $0 balance so you should be clear .

[StartingOver10]

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@newme2012 wrote:

I have one more question about the new FHA collection rule.  If I do a settlement agreement with the collection company will I still have to go back and pay it completely off or will that satisfy the FHA guideline.  I have collections all totaling more than $1000

Thanks,

Jay

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Do you mean you would be paying in accordance with the settlement agreement or just have a written agreement with no payment yet?

FHA is looking for the item in question to be paid. They don't care if you can negotiate it down to a much lesser amount - just that it is paid off and reflects a zero balance. If you can get the CA to accept 15% and get a settled in full you are in complete compliance.

[newme2012]

Thanks everyone.  That is what I was meaning...settled in full with complete payment of the settlement agreement.