Reply
New Visitor
dogrunner
Posts: 3
Registered: ‎08-24-2007
0

Re: whats worse ? foreclosure or defaulting on student loans???

As I wrote to you previously, I moved my loans from a private lender to Direct Loans some time ago, and then I have also refinanced with Direct Loans.  You just have to call them up and ask them if you can refinance with them.  It was never something that was advertised anywhere, but I was allowed to do it.  Direct Loans is much easier to deal with, once you move the loans over--they are willing to do forbearances and deferments for various types of hardship, and to allow you to cut the payments way down per month.

 

 

Established Contributor
rmily
Posts: 670
Registered: ‎07-12-2008
0

Re: whats worse ? foreclosure or defaulting on student loans???

[ Edited ]

<post deleted>

Okay, I was looking at the site a little more and it seems to be promoting one California man's business.

 

Try this site, directly from Hud - HUD - Hope for Homeowners Program

It definitely looks like it'd be worth the toll-free phone call to find out more.

Message Edited by rmily on 10-04-2008 01:52 PM
Senior Contributor
Wonderin
Posts: 3,494
Registered: ‎05-25-2008
0

Re: whats worse ? foreclosure or defaulting on student loans???


dogrunner wrote:

As I wrote to you previously, I moved my loans from a private lender to Direct Loans some time ago, and then I have also refinanced with Direct Loans. You just have to call them up and ask them if you can refinance with them. It was never something that was advertised anywhere, but I was allowed to do it. Direct Loans is much easier to deal with, once you move the loans over--they are willing to do forbearances and deferments for various types of hardship, and to allow you to cut the payments way down per month.

 

 




Are you sure it was a private loan? All the sites (DoE, FinAid, etc) say that only Federal loans are eligible for the Direct Loan program.

 

Could you please cite details? It could really help the OP (Spooky) if you give more information on the whos, hows, whys and whats!! 

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*

Hubby's FICOs when we started: high 400s (June 2008)
Hubby's FICO NOW (04/06/09): TU: 679 EQ: 608 EX: ???
My FICOs: TU: 643, EQ: 606
Closed on new home: 1/20/2009 -- If we can do it, YOU can do it!!

Valued Member
spooky
Posts: 62
Registered: ‎08-26-2008
0

Re: whats worse ? foreclosure or defaulting on student loans???

I am sorry, but If you go back and read all my entries, and if you still have a Q, I will give more details. Ok  ?? Spooky
New Visitor
ionedr
Posts: 1
Registered: ‎10-11-2008
0

Re: whats worse ? foreclosure or defaulting on student loans???

What you've encountered with SM is not uncommon. I went through a few rounds with them to no avail. They have no interest in working with you. They think they own you. If you do not pay the loans then expect to get hefty penalties. I think mine were to the tune of 25%. The debt then escalated to nearly double with interest accumulation. 

 

That being said, I would recommend choosing your home over the loans. Here’s why (and then some)... 

 

1) As stated better by others, you need to live somewhere. If there are options to reduce your housing payments, then work on them. I suspect the banks may be more willing to work with you. They have something to lose. SM does not. 

 

2) Once the full affect of the loans kicks in, the mountain of debt, the employer garnishment, etc you will have a path to peace of mind. There is a limit to how much can be garnished from your wages. Based upon the $70k figure, it should be less than what SM is trying to squeeze out of you. 

 

3) Age. At 50 with $70k loans in default, it is unlikely the debt will ever go away. I stressed out tremendously over the debt, the embarrassment of garnishment, whatever. I finally got over it and moved on. Garnishment is a direct debit from your paycheck and you will probably not be the only one at work with one. As I understood it, once the garnishment has been working (I think a year) the loans are considered as being paid as agreed. The negative marks on my credit report have vanished.  

 

4) Taxes: Expect to get your tax returns scooped up. When this happens, don't be surprised. I recommend that you speak with your tax advisor to help set up your deductions to minimize the effect. I prefer to owe a little each year than to have my return taken. BTW, supposedly you can ask them to stop having the return taken as long as the loans are being paid. Fat chance, I tried this but my calls went unreturned and I got much runaround. 

 

5) Markets change. My guess is that you have another 15 to 20 years of work and I believe that the housing market should improve by then. 

 

I really hope this helps and if any facts are wrong, perhaps someone can help inform you further. 

 

The bottom line is, not to sweat it, your home is more important than the loans and even the credit score. Trust your instincts and avoid letting emotions influence your decision. 

New Visitor
dogrunner
Posts: 3
Registered: ‎08-24-2007
0

Re: whats worse ? foreclosure or defaulting on student loans???

Sorry not to have responded sooner--the site kept timing out when I tried to reply several days ago.

 

Anyway, yes, I definitely moved my loans over from a private lender, but it was about 10 years ago when I did it.  I moved them over to Direct Loans because I had been out of work and the private lender wouldn't work with me and give me any forebearance or deferment until I could get a new job.  Then, I refinanced about three or four years ago when I was getting called by various lenders wanting me to refinance for a lower rate--I just called Direct Loans up, said that I was getting approached by various lenders asking me to refinance with them, and I asked if I could do the same with Direct Loans.  They said yes, as a matter of fact, I could.  So, I did.  I was surprised how easy it was, since I couldn't find any documentation anywhere saying that this was possible. All I had to do was fill out the same promissory note that I had filled out when I applied for the loans initially.  The refinancing was finalized within about a week or so, and I had cut my rate quite a bit with minimal effort on my part.

 

My suspicion is that you will find--like I did--that there is nothing anywhere that says you can refinance your loans with Direct Loans, but that you will be able to do it if you make the call.  Just say you have been contacted my multiple private loan companies asking you to refinance; is it possible to do the same with Direct Loans?  No credit check is required, so I imagine you will be able to accomplish this as easily as I did.  Once the loans get over to Direct Loans, they will work with you and let you adjust your payments on an as-needed basis--they are immensely easier to work with than the private loan companies.  Yes, the economy is a bit slow and I've not been approached lately--however, Direct Loans doesn't have to know WHEN you were approached--you could have the mailings from all the companies that were approaching me stacked up in a pile just like I did and just now be getting around to looking at them.  I doubt they will question you much.  I think in your situation it is definitely worth exploring. 

 

Valued Contributor
1111mel
Posts: 1,060
Registered: ‎02-13-2008
0

Re: whats worse ? foreclosure or defaulting on student loans???

My thoughts......Assuming that defaulting on the SL will make it possible for you to keep your home indefinitely....

 

Default on the Student Loans....These loans will have to be repaid no matter what so it doesn't matter if you default now.... I'd push Sally Mae into the corner and force them to renogiate the loans.....and they certainly won't do that if you stay current.

 

If you foreclose on your home you have far more to lose. 

Mortgage Lenders Mid-Score 778 I AM A HOMEOWNER!!!!! 30 Year 5% Fixed Rate, closed on 3/18/09
Valued Member
spooky
Posts: 62
Registered: ‎08-26-2008
0

Re: whats worse ? foreclosure or defaulting on student loans???

ionedr-I will absolutly take your advice as well as others here. I will call Direct asap. I will keep you posted. Thanx everyone

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}