Short sale charged off then reopened by new bank

[SimplyGawjus]

I sold my home as a short sale in October 2010 and the mortgage was originally with Wilmington Trust/Dovenmuehle. I walked away from settlement owing nothing (so I thought) and when I checked my credit report in January 2011 it was reported as "Settlement Accepted;Paid in Full/less than full balance" Balance Due=0, Account Status= Paid

 

In 2011 M&T Bank purchased Wilmington Trust. I didn't have any accounts with them so I received no notification other than what I heard or saw on the news. So imagine my surprise when I checked my report yesterday to discover that M&T reopened the account March 2011, showing a past due amount of $10,311 and that account had been placed in collections and closed in December 2011. It's still showing an amount due of $10,311 despite the account being closed.

 

My questions are:

a) how can they do this without contacting me via phone, mail, etc?

are they not required to let me know that I have a $10k account in collections?

c) is there any way to fix it/get it off my CR?