Negotiate unpaid collections

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Posted by Christine Baker on October 02, 1998 at 16:58:55:

In Reply to: obtaining a home mortgage. posted by Crash22 on September 27, 1998 at 17:22:04:

:The mortgage lender will not give me a loan until the collection is paid off and we can't put it in my wife's name because she doesn't work. I don't have the money to pay the collection agent.

That's why *I* wouldn't make the loan either. When the collection agency finds out that you had the money to buy a house, they'll probably increase the collection efforts. You'll end up paying them, but not your mortgage.

The average COST of foreclosure is around 20% to 25% of the sales price of the house.

:Is there any way that I could obtain a mortgage and is this cross-collecting that the mortgage company is doing for the collection agency legal?

The mortgage company is NOT collecting for the collection agency. They merely require that the collection be paid to reduce the risk of having to foreclose on you.

:Any advice would help?

Pay the collection or wait until the collection disappears from your credit. A repo is considered a rather serious credit problem.

Have you tried negotiating the collection?

Obviously, don't tell them that you want to buy a house and if they don't have your current address/phone/work, be sure not to give it out (caller ID!) and do NOT use 800#s to contact collection agencies unless you use a pay phone. 800 # can receive the number you call from even with caller ID blocked.

The discounts on collections vary greatly, but I've seen collections settled for as little as 10%.

Good luck,

Christine

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Comments:
: :The mortgage lender will not give me a loan until the collection is paid off and we can't put it in my wife's name because she doesn't work. I don't have the money to pay the collection agent.

: That's why *I* wouldn't make the loan either. When the collection agency finds out that you had the money to buy a house, they'll probably increase the collection efforts. You'll end up paying them, but not your mortgage.

: The average COST of foreclosure is around 20% to 25% of the sales price of the house.

: :Is there any way that I could obtain a mortgage and is this cross-collecting that the mortgage company is doing for the collection agency legal?

: The mortgage company is NOT collecting for the collection agency. They merely require that the collection be paid to reduce the risk of having to foreclose on you.

: :Any advice would help?

: Pay the collection or wait until the collection disappears from your credit. A repo is considered a rather serious credit problem.

: Have you tried negotiating the collection?

: Obviously, don't tell them that you want to buy a house and if they don't have your current address/phone/work, be sure not to give it out (caller ID!) and do NOT use 800#s to contact collection agencies unless you use a pay phone. 800 # can receive the number you call from even with caller ID blocked.

: The discounts on collections vary greatly, but I've seen collections settled for as little as 10%.

: Good luck,

: Christine

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