2nd mortgage charge off settlement

2nd mortgage is wanting to settle for 38,000. I am having a hard time understanding this decision on their part. What bothers me is the fact that they charged off the loan when we have upheld our end of the bargain....Pretty much, we sent them over $15000 in the last 8 months and brought everything current in February and have been making normal payments since and on time....according to the re-payment agreement we had with them. now they are wanting to settle for 38, 000 and agree that it would be considered a settled/paid charge off...what I am having a hard time with is the fact if they were planing on doing this from the get go, why did we have to jump through all the "hoops" just to end up shafted in the long run....If they were going to "charge off" the loan anyway....seems to me that if that was their intention why would they keep taking payments from us unless it was to put the screws to us. Basically by my calculations of past money we have sent and what they want to settle for, is more than what we took the loan out for.......It just doesn't seem fair....Is there a way to get them to lower their settlement offer? Which brings me to my next question, I can't give them $38,000 all at once, so if i settle with them and make payments, is the payments i send them taken off the 38,000 or is it taken off the much inflated price of the loan when they added "charge off" fees.....which raised the amount of what we owe to them by $10,000?