very interesting situation--not for sure how to proceed with charged off 1st mortgage from 10 years ago

[chbartel]

So have an interesting situation.

 

Back in early 2000's, I owned about 85 "units" apartments, homes, etc.   With downturn, I pretty much lost everything and had to sell and short sale properties.  One of these properties had a mortgage with Bank of America.  This was the only home I couldn't short sale, because Bank of America would never process paperwork, etc. I just gave up on it.  I had a tenant in place.  Next thing I knew, they quit paying the escrowed taxes and insurance.  I picked those up on my own.  This was back in 2010 or so.    I had not heard anything from anyone from that point forward.  I have been thinking of selling the property and had title work pulled.  The mortgage still shows on property.  I called Bank of America who sold it to good old Portfolio Servicing in 2011.  Last time it was on my credit report was at least 9 years ago(still showed as Bank of America).  It's now been 10 years.  I called Portfolio Servicing, they show that they charged this off back in 2011(I guess that explains why they quit paying the taxes and insurance that was escrowed).  I asked for balance amount, they told me, it was about what I owed at that time.  

 

I'm thinking of selling and trying to figure my options out here.  He said I can send them a letter with an offer amount and see if they would accept, then it would clear this off title and they would release the mortgage.  I asked if I get this accepted if it would hit my credit report.  He wasn't for sure.  He said they wouldn't pursue me at all now since it was charged off over 10 years ago.    When I was on the phone, they didn't ask for my updated phone #, mailing address, etc, etc. like a normal "collector" would do.  

 

Let say I make and offer and they don't accept, can they technically or potentially still go after me even though it's been 10 years?  I'm trying to not poke the bear, but wouldn't mind getting this thing sold now and off my hands.  My FICO score is over 800 so don't want to mess that up.

 

I am a real estate broker and I did a lot of short sales in the day and also negotiated the 2nd liens for people .  Most banks would take 10% of the 2nd mortgage as payment in full on the 2nd.  I'm trying to figure out what I could request for a 1st mortgage that was charged off more than 10 years ago and have never heard since that point?  

 

Thanks!

 

Craig

Edited August 4, 2021 by chbartel

[cv91915]

You'll obviously need to get the lien released in order to sell.

 

With the main exception being for a Chapter 7 BK that reports for 10 years, most other negative info reports for 7(ish) years.  

 

Whatever both parties agree to do will undoubtedly be memorialized in some form of a written agreement, so even if unnecessary you could negotiate terms that preclude them from reporting anything on your credit ever again for this debt.

 

16 hours ago, chbartel said:

He said they wouldn't pursue me at all now since it was charged off over 10 years ago. 

 

They don't have to pursue you, they have a lien.    They'll get their money eventually.

 

With that said, "charge-off" is an accounting term.  They could still foreclose, so it's not like they don't have any leverage on how much/little to accept to settle this.  Whether or not it would be worth their time and effort to foreclose would depend on the balance owed and their assessment of your ability to repay.

 

I would do one lump sum payment to settle this to prevent unintended consequences (something starts reporting when it shouldn't and it becomes impossible to fix, you reset the SOL and they sue you, etc.).

 

Wait for other opinions, and good luck. 

 

Please post the outcome when this is resolved, as I'm sure it'll help someone in the future.

 

 

 

Edited August 5, 2021 by cv91915