The short story: Bought a home just before the housing market crashed. Love the home, decided to stick it out. Not that big of a deal now b/c the market is slowly turning. Modified the first mortgage to a great rate/terms, etc. The problem: The second mortgage that was in the original deal was charged off. I know, not so great, but it happened. I knew it was charged off and have read that they can still collect on the pay off if I sale. I am slightly confused about that. How is that? Didn't the mortgage company receive a tax benefit when they wrote off the mortgage? I know the value of the home was so low at the time, that I can't imagine they did not receive tax benefits. Also, As many of the loans from that time period, the second mortg has been sold/transferred several times. So, I decided to validate the debt with the last company. They did respond, but it took them a very long (many months) time. They certainly did not meet the 30 time period. Also, they indicated that they had sent their response certified mail. When actually, they sent only UPS 2nd day (I kept the air bill). They only sent me a copy of my original loan papers (which I already have), but is that adequate validation? It doesn't establish a debt with this particular company. I am really thinking that they don't have a whole lot to stand on based on their wording and the time it took them to reply. But, this is a large amount ($65,000) and I have never dealt with anything of this magnitude.I just want the charge off question explained to me if possible and any help on what the heck I should do would most certainly be a blessing. Do I push the validation? Is that pointless? Should I seek lawyer representation? Do I have any chance of winning? I imagine I could possibly push to modify it if need be, but I really thought it had been "discharged." Ugh - just when I think I'm getting ahead. Reatha
>> I knew it was charged off and have read that they can still collect on the pay off if I sale. I am slightly confused about that. >> How is that? Didn't the mortgage company receive a tax benefit when they wrote off the mortgage? When a company "charges off" a debit, that simply means it removed it from it's books as an asset (they assumed you'd never pay, so they can't consider it an asset). Interest and fees can grow on that debt exponentially. Charge off does NOT relieve you from the debt obligation. >> I am really thinking that they don't have a whole lot to stand on based on their wording and the time it took them to reply. You signed a contract. You still owe the debt, no matter how many times it gets sold. >> I imagine I could possibly push to modify it if need be, but I really thought it had been "discharged." The only way a debit is DISCHARGED (not the same as a charge off) is if it is included in a bankruptcy filing. Did you file and complete bankruptcy? If not, the debt was not "discharged". You still owe and, again, it can/will grow.
