Reader Financial Horror Stories, Part 4

Here's part 4 of a piece detailing very bad financial happenings Bankrate.com readers have suffered:

The undead credit balance

After moving to Florida, we began looking for a home and found one we liked. We made our offer and it was accepted. We began the mortgage process. The mortgage company pulled our credit reports and told us we owed Phantom, our credit card issuer, $9,934. However, the credit reports also showed that we paid in full and were never late with payments. We explained that there had to be an error because we paid off our credit cards in 2004 and never heard from Phantom again. We called Phantom at the beginning of June, and they told us they would start an investigation. We explained that time was critical, as we were to close on the house at the end of June. We kept calling them two to three times a week, until just days before the closing -- they kept insisting they were investigating and that it could take up to 60 days. We put off the closing till end of July but kept calling Phantom two times a week and got the same answer -- they were investigating. Then came the end of July and there was still no resolution. The closing was put off until the second week in August. We called again the first week in August only to be told that no investigation had been started -- they would start one at that time!

Now the seller began looking at us as though we were deadbeats. We had taken his home off the market for over two months and he was threatening to keep a large portion of our deposit if we didn't close by the end of August. The mortgage company would not believe we did not owe this money and insisted that if we wanted this mortgage we had to pay the Phantom card and send them a copy of the bank check before they would approve the mortgage. We used our closing cost money to pay Phantom off and ended up having to borrow money for the closing so we wouldn't lose our deposit and the house. We were then forced to fight with Phantom, write letters to the Better Business Bureau, Consumer Affairs, Office of Thrift Supervision who monitors Phantom, and our attorney general to advise them of what Phantom and the mortgage company made us do. We closed on the house and are still fighting Phantom for a refund -- and still haven't received any documentation from them to substantiate this erroneous charge. Their representatives were arrogant and nasty on the phone and just downright uncooperative when asked what they did with the money I sent them in 2004. This has just been a total horror from June to present.

This is an example of a bad decision following bad luck. They should have never paid the credit card company a second time and are now at their mercy with little to stand on. They should have tried to negotiate with the owner (lease to purchase agreement, pay rent while the issue was being resolved, etc.). By the way, how much was the deposit they risked losing? If it was a low amount, then they REALLY made a bad decision.

Click here to read part 5 of this series.

Comments

[Ervin]

That was not bad luck, but stupidity. How could those people decide to buy a house without first checking their own credit reports? This is Borrowing 101.