URGENT HELP - HELOC Account Charges off Wrongly, bank requesting for settlement

[njinn]

I have a HELOC with 100k line of credit and 40k balance, i received an offer to close this account for 30% of balance amount. Is this legal or correct for banks to do this. I still have time left on my withdrawal period and they have close the access to the account. The offer is one time payment, any advise please.

[Evan Bedard]

I have a HELOC with 100k line of credit and 40k balance, i received an offer to close this account for 30% of balance amount. Is this legal or correct for banks to do this. I still have time left on my withdrawal period and they have close the access to the account. The offer is one time payment, any advise please.

Welcome and thanks for joining the forum.

You are saying that you are delinquent and the account has been charged off correct? If so, it is common for a lender to offer x amount to settle an account especially if the mortgage is underwater. We have many members here who have, or are in the process of settling their 2nd mortgage/HELOC. Here read the first posts in the thread provided below:

Strategy for Settling Your 2nd

[njinn]

i am not delinquent, i have time left to withdraw money and also 20 years left to payoff the balance (interest & balance). I even received an application form 2 months back to extend the withdrawal period for another 7 years, which would have allowed me to withdraw as well as pay only interest at Prime - .76%.

Would this be a mistake or would it be a possible strategy to close occounts which earns less interest.

Any advise will be appreciated .

[njinn]

My HELOC account has been reported by the bank as Charged Off/Written Off to credit burea. They have send me a letter for settlement by paying ~ 35% of balance. I have responded to them by offering 15%.

Should i not pay anything and go for a legal fight or pay a very less amount and settle it.

Would they be able to change the Charged off account to active and ask me to pay all the balance.

[njinn]

I received a settlement offer letter to close my heloc account and when i asked them to validate the decision to charge-off they are now admitting it was an error in closing my account. They said the closed loan account will be re-opened, is this possible. There is no payments made on this account for 2 months as it was closed and take away from the system nor it denied me from withdrawing money from credit limit. Is it legal for them to do this, can i challenge is court.

[Evan Bedard]

I received a settlement offer letter to close my heloc account and when i asked them to validate the decision to charge-off they are now admitting it was an error in closing my account. They said the closed loan account will be re-opened, is this possible. There is no payments made on this account for 2 months as it was closed and take away from the system nor it denied me from withdrawing money from credit limit. Is it legal for them to do this, can i challenge is court.

If you were current on payments prior them charging off the account this should have never been done. Your HELOC should only be charged off if you fall 120-80 days behind on payments, which in that case it would make sense for them to offer a settlement on the account.

Since they made a mistake charging off the account are they agreeing to bring the account current once they reactivate the account?

[njinn]

They said they will fix it, i am not sure how loan account which is closed with no payment made for 2 months can be shown on record with the credit agencies. Will it show that i was not paying for 2 months and delinquint ??