We filed a hardship letter with CitiMortgage and they agreed to settle our 2nd mortgage (equity line) by paying $60,000 and they would not pursue the remainder of the debt of $216,535 but would file a 1099C Form. We would then have to come up with $102,000 for the tax consequence. We want to refinance our 1st to include this amount so we can pay it and would need to borrow $480,000. We can do this if we have a good credit score. We have excellent credit now but how will this affect our credit score. CitiMorgage will report to credit reporting agencies “as paid if full for less that the full balance”. Will this affect our credit score where we won’t be able to refinance our 1st mortgage due to this?
CitiMorgage will report to credit reporting agencies “as paid if full for less that the full balance”. Will this affect our credit score where we won’t be able to refinance our 1st mortgage due to this? Will we go from excellent credit to a bad credit risk because of the 1099C form – Cancellation of debt. and the paid for less that the full balance.
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