Private student loan charge-off

[Anonymous]

OK, not sure if this should go here or with mortgage threads but I'm giving it a shot.  Go easy on a newbie.  I plan on applying for FHA this fall. I need a few more points before I'm ready to apply.  I currently have 2 private student loans that are reporting "charge off" and "claim filed w/government" from AES.  The accounts have been assigned to NCO who I am DVing as we speak.  I hope they really don't keep good records like everyone says, because I absolutly REFUSE to deal w/those vultures.  Bullying and scare tactics just p*** me off when I am trying to deal with people.  Anyway, enough ranting, back to point-I need:

1)advice on how to deal w/AES when I can finally get NCO off my back (and answering machine).  I really want to settle this, but I've read some icky things about AES on here too.

2)does FHA view private loans the same as federal? It is listed as default, but my federal loans are all Paid as Agreed.  Will this prevent approval as a default or am I basically just trying to give an explanation of a collection account to underwriters?  I have a good pay history on my other 2 loans, my husband got laid off right before this went into default.  I think I can give a good enough explanation to an underwriter on that aspect. 

Any input would be greatly appreciated.

[Anonymous]

If they are private loans, they wouldn't have a "claim filed with gov't".  That's what makes a loan Federal: if the lender doesn't get their money from you, they get it form the government by filing a claim.  Private lenders can't do that. 

That loan is probably Federal.  If so, you can rehab it, which means you make 9 months of payments on time and the default goes away.  You might still be able to rehab a private loan, just ask!

[Anonymous]

Ok, on that note, is there any way AES is reporting incorrectly, because the loan was definately private, and it is only reported that way on one CRA, the rest show charge-off.

[LynnInMN]

AES is both a private lender and a FFELP lender.  Are you sure these are not FFELP loans??

Either way it will be next to impossible to get an FHA loan.  With a defaulted federal loan, you would be ineligible.  With a private loan, they wont want to touch you  since there is a huge possiblity you will get sued.  

[Anonymous]

Although I have some stupid looking financial mistakes that I am currently trying to rectify, I do however remember that the loans I took out are NOT federal.  They were actually guaranteed by TERI, not the FEDERAL government.  And TERI has now tanked as far as student loans go.  As far as the HUGE possibility of being sued is concerned-NCO definately doesn't scare me and AES is reporting my balance as zero since I assume they got some of TERIs money before they went belly up.  The loans are actually very small and have been in default since 2005 so if they are going to sue, they are taking their sweet time.  But thanks so much for the "helpful" advice.

Back on point, now that I've done a bit more digging, I'd still like to know who to actually deal with here as I do want to settle these, but I'm not sure where money should go, or who even deserves it at this point.  NCO are jackels and I'd rather rot than deal w/ them, AES got money already from the guarantor, so who now, TERI? They don't do student loans anymore, but do they still collect on old ones?  I'm not really one to let these things go as I did assume the loans and do actually owe the money.

Any actual advice??

[LynnInMN]

Advise.  Well for starters, dont DV...that is seen as a stall.  They can and will verify quickly and often DV'ing student loans starts the court proceedings.  It will most likely have someone pulling your credit report again.  If you have already started the mortgage proceedings and have mortgage inquiries, they will see that.  That puts them in a position of power...you want something and thus they have little incentive to settle.

You do not have the option to work with the lender just because you have read negative things about the CA.  CA's are hired under contract for a specific period of time, and thus most lenders wont pull them or move them with out good cause, like an FDCPA violation...something verifiable.

I have also read that settlements lately for TERI accounts have not been that big.  If your loans are small as you say, dont expect much more than 10% off.  Just because they are in BK, doesnt mean they are out of business.  Look at the airlines.

My suggestion is pay these off quickly and quietly.