I need help trying to decide on how to deal with a unpaid collection that is reported only on my Experian file. The collection is with RMA for a phone bill. The balance reported is $754 and was last updated in 6/2000. The delinquency date is 3/99. I have never received a bill from that CA or got in contact with them. I didnâ??t want to dispute the collection before applying for the mortgage since I didnâ??t want them to come back and report it in all 3 CRAâ??s.. It was kinda dormant. Other than that collection, my credit file is clean. My middle score is 717. The problem is that I am supposed to be closing on mortgage next week. Prior to shopping for a house, the loan office got my pre-approval and he said that I â??mayâ? have to pay that collection at closing. After finding a house and proceeding with the loan (I have a combo 80/15/5 loan), my loan broker said that he has processed my loan and actually because of my good scores I donâ??t need to pay that collection. Now yesterday, just 7 days before closing, he called me again to tell me, that the second mortgage company (for the 15% loan) requires that the collection be paid before closing. He said that the closing agent (escrow company) can take care of that at closing if I want to. So I will just bring an additional cashierâ??s check to pay for the collection at closing. I am kind of trying to think it over now. I have two options: 1 â?? Call the collection agency right now and try to settle it with them even if I would have to pay the full amount but I would have a chance to get them to delete it completely if I pay it in full. The problem here is that, I may end up paying, and the CA might turn around and just update it as paid in all 3 CRAâ??s.. Itâ??s now at Experian only. I wonâ??t have enough time to fight with them before closing. If that happens, then my scores would drop significantly with TU and EQ and I would risk losing the loan completely. 2 â?? Wait and pay it at closing. I am thinking of calling them on the morning of the closing just to get the account number as I donâ??t have that. However, I wonâ??t have enough time to settle any deal with them. Also I am really worried that they may have added a bunch of bogus interest. The tradeline is last reported on 6/2000 with a $754 balance. Your help and opinions are really appreciated Alex --- TU 774 mortgage : 737 EQ 701 mortgage : 701 EXP (CE) 698 mortgage : 717
Any comments?? I am actually thinking that my best bet would be handing the collection payment to the escrow company at closing.. And right after closing, I would call the CA and negotiate with them a full payment for removal. That would be done before the money reaches them from the escrow account... I basically feel that I would be in a lot of risk dealing with a CA now with closing less than a week away knowing how CA's can screw things up.. However I should be OK negotiating with them right after closing... Right??
Pay it at closing then wait about one month after closing to give the CA enough time to credit your account, update it as paid, and store your file in the "already paid" vault. Then dispute the account with the credit bureau. Good luck. Calmest_LA
Thanks for the reply.. That seems like a good plan. Another question, are CA's allowed to add interest to any account they have? This specific collection is for a phone company. The CA (RMA) reported it on 6/2000 for an amount of $754.00. It's has never been updated since then. Would I expect them to have a significantly higher balance now due to accumulated interest (2 years) ?
Only if it is expressly written in the contract you had with the OC, otherwise no it is illegal under the FDCPA. It seems like they have you between a rock and a hard place! There is no real time to dispute this now since you will be closing on the home soon. I think your only hope is to pay it at closing and dispute it with them right afterwards. I mean it may sound redundant because you are paying but you still have an obligation to receive the validation if you request it. If you did have to go to court over this you have a pretty decent explanation for the judge on why you paid it. Obviously it was paid under duress and anything paid under duress is inadmissable in court. Good Luck! Tac
