04-17-2013 11:53 AM
I planned on coming to the forums today to ask about the rehab agreement that I was sent from CTI. However, now its a little more complex.
Firstly, I wanted to ask about the loan rehab agreement from CTI I dont have it right in front of me but it reads something to the effect of recapitilizing 18.5% of collection fees into my new balance?
Sencondly, I agreed to pay CTI 300 down and 75 a month to rehab my loan. I wanted to rehab the loan becasue I know that it will help the appearance of my tradelines. My original student loan was for 3000 and I paid on it for a few years before default, and then I had a tax refund a few years back go to it so even with collection fees it was only at 2200. After I paid the 300 and 3 payments of 75 I had it down to 1800 and change. Fast forrward to today I got my tax refund check from the IRS. However it was 1500 light that they said they paid toward my student loan. If im not mistaken this leaves a balance of almost exactly 300 left on my student loan. With 6 months of rehab left at 75 a month this will never make it to the end of rehab.
Questions...(Keep in mind my biggest concern is being able to qualify for a mortgage)
1. Should I sign the rehab agreement? I think I remember reading something about getting collection fees back if you pay off a loan? If I agree to rehab now then am I just throwing those fees away?
2. Is the reason they only took 1519 from me becasue the last 300 and change was the collection fees which they would have given back? So do I even have a balance now?
3. If I do have a balance remaining of 300 is it possible to pay the 75 a month until I get to the 6th payment and get a new loan and consolidate? Would that change the tradelines?(Of coarse this would also have an effect on score as a new loan)
4. How long will these report and since now it doesnt appear that Ill make it through rehab what effect will paying them off have for my credit? I defaulted in 2008.
04-17-2013 12:29 PM
Hideous, you have a really weird set of circumstances here.
So clear this up for me: you've already started rehab, correct? They recently sent you some paperwork to sign, but that was after the payments started.
I'm inclined to think that you could argue that you entered into the rehab agreement, and that if the balance is paid off before the end of rehab they should still keep their end of the bargain and remove the default & update the tradeline all the way back to 2008. This is probably the best thing that could happen for your scores, esp. if you're looking to get a mortgage. That said - this early payoff is not a circumstance we've seen very many times here, and no one's been great about reporting back to let us know outcomes. So you're in a little bit of uncharted territory here. Is the offset payment showing when you log in to Myeddebt.com? (I only ask because mine did, and I could then see the updated balance of the loan.)
My advice would be to call CTI and confirm they received an offset payment, and find out what the balance of the loan is after that. If it is indeed $300, then how does that work in term of your rehab? They'd be the best source of info here. There was someone recently who posted (and danged if I can't find it now) that was told that if the balance was paid down before the rehab period was completed that the default would still be removed just as though rehab had finished out.
I can't give you any advice on getting fees, etc. back. My thinking was that I wanted to improve my scores, and so whatever hoops I needed to jump through to get a mortgage-worthy score would be worth it in the long run. YMMV. I'm also not sure why you would want to consolidate? The point of rehab is to get the default removed and get your tradelines reporting with 5 years of perfect payment history - which you can only get with rehabbing.
04-17-2013 02:59 PM
I'd also contact the student loan ombudsman's office as well for some guidance.
04-17-2013 03:05 PM
Before doing anything, the Ombudsman's office will ask if you have "exhausted all efforts to work things out with the lender". I would at least get some answers from CTI first, so that you know what you're dealing with before calling in the big guns, so to speak.
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