My husband had a capital one credit card for years, prior to us getting married. He never missed a payment and each payment was paid in full. A year after marriage, our card was stolen twice and replaced twice by capital one. We filled out the necessary paperwork, stating which charges were not ours and we mailed the paperwork in. We canceled the account, until the matter could be resolved. Capital one would not help us in our situation and always gave us the run around. Eventually capital one sold our account and reported it, as written off. My husband deployed to Iraq and I received a letter stating that our account was sent to collections (United Recovery Systems). We were sick of the harassing calls, so even though the debt was not ours, we decided to pay it off. We paid it off last year and now we are trying to buy a house. This is his only negative report and it has brought down his credit score tremulously: Almost 70 points to be exact! The creditor originally stated that it would be removed from our credit score, if paid in full.
My question is, how can we go about getting this removed from his credit? If it cannot be removed, what should our next step be?

You paid off a debt which wasn't yours because the collection company was harassing you? I'm sure you know now that that was a mistake.

The BEST you can do at this point is write letters to the various credit reporting bureaus, explaining the situation.

I cannot imagine a situation where this will be removed. That is just not how credit reporting works.