2nd mortgage charge off

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Icon Mini Profile safemba2003





Joined: 29 Dec 2009

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Post Posted: Tue Dec 29, 2009 5:22 pm    Post subject: 2nd mortgage charge off
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The 2nd mortgage on a home that went into foreclosure at the end of 1999 continues to be sold to other institutions. It was written off by the first institution at the end of 2002. Since then it has been sold twice. Recently I checked my credit report at another financial institution has reported it as bad debt charge off with little details. The statute of limitations ran out years ago and it was originally reported to the credit agencies at the end of 1999 so it has been more than 7 years. How do you correct this?
Icon Mini Profile smithsussane
smith.sussane




Joined: 18 Sep 2008

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Post Posted: Tue Dec 29, 2009 9:27 pm    Post subject:
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Hi safemba!

Welcome to forums!

A charge off is a negative item and will remain on your credit report for at least 7 years. However, as the SOL period is over, the creditor/collection agency will not be able to file a lawsuit against you in order to recover the dues. You can check the given page for more information on charge off:
http://www.mortgagefit.com/credit-rating/charge-offs.html

Feel free to ask if you've further queries.

Sussane
safemba

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Post Posted: Wed Dec 30, 2009 6:44 am    Post subject: 2nd mortgage charge off
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So in a few words what you are telling me is

Even though the statute of limitations has long expired and the creditor has no recourse to collect he/she can continue to sell this bad loan as part of a portfolio of loans to any sucker who wants to buy it on pennies on the dollar hoping to collect on some of it. They will continue to do this Indefinitely and continue to report to credit agencies Indefinitely
In summary once it is charged off unless you pay it or negotiate with them, which will then trigger the statue of limitations agian, it will be on your credit report forever. Correct? Bouncing from whoever buys it to the next. And we know there is a great market for this. Now even more with the financial meltdown it will be interesting to see how this area developes and what kind of new regulations will be implemented.
However the original charge off was reported buy the first financial institution over 10 years ago. Why can they continue to report the loan as bad to the credit agency? I received a 1099 form from the original loan holder and paid taxes on it. Why is it that the system allows the financial institution to take a tax credit and remove this bad asset from its balance sheet and then make a profit on it by selling it again? Then the next holder does the same thing. They even make a profit by charging a transaction fee. It appears to me that this does not follow proper accounting principles. I am not a CPA or accountant but it appears that FABSA and the SEC would consider this somewhat inappropriate. Repeatedly selling non performing assets (bad loans) as part of portfolios to potential investors is an interesting way of making money.
Any comments?
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Post Posted: Thu Dec 31, 2009 1:00 am    Post subject:
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Contact an attorney and discuss your case with him. This will help you know whether or not you will be able to remove the charge off from your credit report.
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