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Old 04-20-2009, 02:00 PM
 
40 posts, read 92,181 times
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My second mortgage is going to give me a “charge off” after completing a short sale.

Will I have to pay:
1. The full amount?
2. The amount plus interest and fees?
3. Or is it likely they would take $0.50 on the dollar?

I have other houses which I would like to keep.
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Old 04-20-2009, 02:31 PM
 
26,590 posts, read 56,794,228 times
Reputation: 13073
Quote:
Originally Posted by toad pad green View Post
My second mortgage is going to give me a “charge off” after completing a short sale.

Will I have to pay:
1. The full amount?
2. The amount plus interest and fees?
3. Or is it likely they would take $0.50 on the dollar?

I have other houses which I would like to keep.
Your bank is not obligated to take anything less than the full amount owed plus interest in fees. It's entirely up to them. My guess is that they might settle with you for less than the full amount owed, but a lot will depend on your equity position in the other house, income, etc. Also it will appear as "settled" not "paid" on your credit, so expect a longer wait to regain a good credit rating.
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Old 04-20-2009, 05:47 PM
 
Location: Sacramento
2,568 posts, read 6,198,732 times
Reputation: 1924
Quote:
Originally Posted by annerk View Post
Your bank is not obligated to take anything less than the full amount owed plus interest in fees. It's entirely up to them. My guess is that they might settle with you for less than the full amount owed, but a lot will depend on your equity position in the other house, income, etc. Also it will appear as "settled" not "paid" on your credit, so expect a longer wait to regain a good credit rating.

I thought charge off means that they write off the debt and take it off their books as bad debt.
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Old 04-20-2009, 06:05 PM
 
26,590 posts, read 56,794,228 times
Reputation: 13073
Quote:
Originally Posted by suzie02 View Post
I thought charge off means that they write off the debt and take it off their books as bad debt.
It stays on your credit report and you can't get it off without paying it off. Just because they write it off their books doesn't mean that they'll take it off your credit report.
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Old 04-20-2009, 07:06 PM
 
Location: Sacramento
2,568 posts, read 6,198,732 times
Reputation: 1924
Quote:
Originally Posted by annerk View Post
It stays on your credit report and you can't get it off without paying it off. Just because they write it off their books doesn't mean that they'll take it off your credit report.

Right but do they go after the debtor or does it stop there?
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Old 04-20-2009, 07:11 PM
 
26,590 posts, read 56,794,228 times
Reputation: 13073
Quote:
Originally Posted by suzie02 View Post
Right but do they go after the debtor or does it stop there?
Generally they no longer go after the debtor--although they certainly can do so. Sometimes they sell the debt to another company.

Not paying it will bring your credit score way down, and will likely impact your credit cards, your homeowners and auto insurance, and even your employment.
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