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stmarycherryhill · Joined: 26 Oct 2009 Posts: 1 1.49 Dollars($)

I have a 2nd mortgage on my home. In 2004 i was laid off but was able to stay afloat. In Jan 2005 it all fell apart. I was not able to make the payments on 2nd mortgage, but did maintain 1st mortgage. I was never late on 1st mortgage payments. In June 2005, 2nd mortgage co put my house up for sheriff sale for the amount I owed them. They did not even consider the 1st mortgage co. I resolved this issue and was told the loan was to be reinstated. I made monthly payments since then. In Jan 2009 I applied to rewrite the mortgage and combine both 1st and 2nd mortgage. All went well until the 2nd mortgage co was contacted to verify payments were made. At this time, I found out this had had been charged off in Jan 2005. This was not reflected on my credit report. The credit report said the loan was delinquent. I have still not refinanced because of this. In 2005, 2006, 2007 and 2008 I received 1009's from them showing I paid over $15,000 in interest. I have made the payments in 2009 and I bet I will get another 1099 for this year. I have talked to the lender (GMAC) on several occasions asking them to remove the charge off status and they have refused. Meanwhile, the re-finance cannot be approved until the status is changed. My question: Can a charged off loan still be collecting interest and/or late fees?

savior70 · Posted: Tue Oct 27, 2009 4:11 am Post subject:

Hi,

Charge off does not necessarily mean the debt has been forgiven or cancelled. The second mortgage holder probably thought they would not be able to recover the balance amount of the loan and sold it off to another mortgage company. In such a case, the charged off loan will still be collecting interest and the borrower will be legally liable to pay it off.

As long as the second mortgage shows charge off status, no lender would allow you to refinance and consolidate the first and the second loans. I think you should talk with the mortgage company which holds the debt after the charge off. You can negotiate with them to try and settle the debt for a suitable amount. You can then pay off the debt through a repayment plan and request them to remove the charge off from your credit report.

Guest

Thank you for your reply...The 2nd mortgage co. (GMAC) is still holding the loan and they have been accepting monthly payments from me. They did not sell it off to another company. I have had a few conversations with them and they have been very unforgiving and difficult to work with. In fact, the charge off status was told verbally when, during the re-finance process, a third party called GMAC to verify the payments were received. It was not reflected on my credit report. This has been a very difficult situation. They told me that the account was considered "non-performing". If it collecting interest, how can it be considered "non-performing".

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