Saxon Mortgage holds short sale hostage for more money

MH in Texas said: “I sold my home financed with Saxon 38 months ago on a short sale. After all of the negotiations were complete and closing was scheduled for the next day, Saxon called me the night before closing and told me I would have to sign a note for repayment of $ 12K over 36 months or they would not close on the short sale.

Because I thought that was totally unfair I never paid any of it. So from the beginning they have reported the note as a mortgage on all three bureaus and currently it is showing 38 months late, or 120 days times 19. Is this legal ? Can they never charge it off ? The bill I get each month even has the address of the home on it that was sold in the short sale 38 months ago. I need some help with this.”