Posted on: 18th Mar, 2009 03:32 am
My house was foreclosed on, sold, and recieved a tax form. Now I recieved a letter saying it was charged off but I need to pay the difference of the sale and the loan amount. What does this mean?
Hi sheliaduffey,
The lender has charged off your balance loan amount. This does not mean the lender has forgiven the amount. It only means that the lender is considering this balance amount as a loss as they think they cannot recover it and this is why they have given the collection rights of this amount to a third party collection agency. If you keep making payments and pay it off, it will be reported to the credit bureaus as a 'paid carge off'.
Thanks,
Jerry
The lender has charged off your balance loan amount. This does not mean the lender has forgiven the amount. It only means that the lender is considering this balance amount as a loss as they think they cannot recover it and this is why they have given the collection rights of this amount to a third party collection agency. If you keep making payments and pay it off, it will be reported to the credit bureaus as a 'paid carge off'.
Thanks,
Jerry
i have a mortgage on 2 rental properties that i was trying to do a loan modification on. one company said that the loan had been charged off. the other sent me to the charge off department when i called to make the payment on the loan modification that was already set up and approved. i had already filed chapter 7 bankruptcy. what will this mean to me as far as still being responsible for the loans, and the disposition of the property.
Hi
A charge off does not mean the debt has been forgiven. It simply means that the mortgage holder think they cannot recover the loan amount and thus, for accounting and tax purposes, they show it as their loss. They charge off the loan to a collection agency who collects the balance mortgage amount from you. Even if you have filed bankruptcy, you will still be required to pay off the balance amount to keep the house and you may have to reaffirm the loan with the collection agency in order to do so.
A charge off does not mean the debt has been forgiven. It simply means that the mortgage holder think they cannot recover the loan amount and thus, for accounting and tax purposes, they show it as their loss. They charge off the loan to a collection agency who collects the balance mortgage amount from you. Even if you have filed bankruptcy, you will still be required to pay off the balance amount to keep the house and you may have to reaffirm the loan with the collection agency in order to do so.
I have three rental properties under one mortgage company. I thought the houses were in foreclosure; yet when I called the bank, I was informed that the properties were charged off and that the principal balance due the mortgage company was zero. I was told to sell the properties. Are the banks walking away from these houses? Do I still have legal rights, where do I stand in this matter?
Hi charlotte,
If the loans were charged off, it means that your lender have given them to a collection agency and will report the loans as their loss for accounting and tax purposes. This does not mean that the loans have been forgiven. If you intend to keep the properties, you will still have to make payments for the loans, not to your lender though, but to the collection agency.
Thanks,
Jerry
If the loans were charged off, it means that your lender have given them to a collection agency and will report the loans as their loss for accounting and tax purposes. This does not mean that the loans have been forgiven. If you intend to keep the properties, you will still have to make payments for the loans, not to your lender though, but to the collection agency.
Thanks,
Jerry