cancel
Showing results for 
Search instead for 
Did you mean: 

Private SL Default

tag
diveforfun97
Frequent Contributor

Private SL Default

Hello all!  Here is my situation.  I have worked very hard to get myself in a great position for a mortgage.  I got my pre-approval, confirmed purchase offer, house inspect and appraisal done.  I just got my mortgage commitment letter and the only condition on it is to show that a student loan on my credit report was paid in full.  Here is the deal with the student loan.  I have a private student loan that when into default a couple years ago.  The loan was paid off by another company as a guarantee to the loan.  So the original loan has been paid in full, and I pay the other company $200 a month (I have been paying this since the loan was put in default so around 18-24 payments so far).  The underwriter wants a letter showing that the original loan was paid in full.  I guess technically that account has been PIF, but I am very very nervous about this condition, and I did tell my mortgage officer about all of this from the get go and he says its not a big deal.  As a side not my DTI is next to nothing and I was approved up to 275K , but the house is only 186K......I like being more conservative. :-)  Any feedback will be greatly appreciated.

Starting Score: Sep 23, 2014 EQ 577 TU 583 EX 567
Current Score as of 6/28/17 EQ 628 TU 643 EX 625
Goal Score: 700
Message 1 of 8
7 REPLIES 7
Anonymous
Not applicable

Re: Private SL Default

You might have some problems proving that the loan is paid in full, because it really has not been.

 

When the loan went into default, the guarantor paid the original loan holder and the loan was transfer to the guarantor. You are still on the hock for the original loan plus any collections fees. 

 

You said you made 18-24 payments so far, did you ever try to rehabilitate the loans to get them out of default.  I also had a student loan I default on, just completed the rehab about two months ago, saw a 40 point jump in my score once it was all said and done.

Message 2 of 8
diveforfun97
Frequent Contributor

Re: Private SL Default

I called them and they said that they dont rehab private loans, just federal ones

Starting Score: Sep 23, 2014 EQ 577 TU 583 EX 567
Current Score as of 6/28/17 EQ 628 TU 643 EX 625
Goal Score: 700
Message 3 of 8
Anonymous
Not applicable

Re: Private SL Default

Call the original loan company and ask for a letter stating the loan was paid in full by the guarantor.

Message 4 of 8
ShanetheMortgageMan
Super Contributor

Re: Private SL Default


@Anonymous wrote:

Call the original loan company and ask for a letter stating the loan was paid in full by the guarantor.


+1

Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 5 of 8
MBOhio2
Established Contributor

Re: Private SL Default

I can't offer any help, but I am going through a similar situation (defaulted private student loans), so I have a question for you.

 

What is this second company you are referring to that you now make payments to? Did they essentially buy the defaulted loan from the OC or did you somehow apply for a loan with the second company to resolve the default with the 2nd company? I'm just curious about the facts because I'm trying to figure out how to manage my defaulted loans and buy a house too! Thanks Smiley Happy

Mid-2010 Starting Scores: FAKO EQ 476 FAKO EX 506 FICO TU98 575
July 2017 Current Scores: Approx 710 (waiting for official updates)
Message 6 of 8
diveforfun97
Frequent Contributor

Re: Private SL Default

Thanks to everyone on the imput.  I requested the letter and I should have it today.  I will post with the results.

 

MBOhio2-  The company I make payments to is the company that i guess paid the loan off.  I did not apply for a separate loan.  Hopes this helps.

Starting Score: Sep 23, 2014 EQ 577 TU 583 EX 567
Current Score as of 6/28/17 EQ 628 TU 643 EX 625
Goal Score: 700
Message 7 of 8
MBOhio2
Established Contributor

Re: Private SL Default

Definitely update us on how it goes!

Mid-2010 Starting Scores: FAKO EQ 476 FAKO EX 506 FICO TU98 575
July 2017 Current Scores: Approx 710 (waiting for official updates)
Message 8 of 8
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.