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LynnInMN
Posts: 465
Registered: ‎06-13-2008
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Re: Woah, big trouble with Sallie Mae

If this was in fact a federal loan, SM would have already long since filed a default claim with the guarantor.  Once the guarantor gets it, they add on up to 25% in collection fees, as mandated by federal law.  The loan balance is accelerated and becomes due in full.  There are options to getting the account out of default....rehab or consolidation.  Either way, he will be stuck with the negative SM tradelines....it is the ultimate responsiblity of the borrower to keep SM informed of their current address....not a parents. 
 
If it is a private loan, there are no options except paying the loan off in full.  Private loan defaults are brutal.
Ex-Financial Aid Officer

Ex-Student Loan Collector
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UpUpUp
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Registered: ‎06-03-2008
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Re: Woah, big trouble with Sallie Mae

[ Edited ]
Thanks, Lynn. I got ya, and while yes, technically it would be his responsiblity, but this is not a dispute about where the bills were sent or having a correct address. This is a crappy situation between him and his mother. He NEVER had a handle on this loan from day one. She applied for it, she paid the payments from day one and has for years. He never had account information or anything the entire time. I don't understand why it was financed in his name to start since this was clearly a typical parent paying for college type of arrangement. Though all of that makes no difference - the damage is done.


Message Edited by UpUpUp on 06-19-2008 10:17 PM
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UpUpUp
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Re: Woah, big trouble with Sallie Mae

[ Edited ]


ivyalmighty wrote:
He really, really, really needs to call SM instead of you looking for answers on here. Every day that he hasn't contacted them is another day closer to them seizing his bank accounts or sending it into REAL collections, where there won't be ANY hope of rehabbing.
 
Please please please have him take over this issue and call ASAP.


Oh, I agree, but he was waiting to talk to her. (Not my advice, trust me) Didn't have a clue what was going on, if there was a chance it was a mistake and I think he was a little afraid of what to do.  I of course have no ability to help him. Though, he quickly realized how serious this was when I showed him the updated Experian report showing the claim was filed with the government. He put 3 calls into her at home and her cell and then this morning. He did call SM, and it was transferred to some other company.  I think what he did was get it rehabbed. Not sure what the terminology is, but he had to pay a big payment (assuming the past due?) and now scheduled for $100 per month payments. They said they hold the loan for 9 months and after good payment history will transfer back to SM.  Is this "rehabbing"?


Message Edited by UpUpUp on 06-19-2008 10:19 PM
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BUBBA107
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Registered: ‎06-19-2008
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Re: Woah, big trouble with Sallie Mae

I work in the mortgage business and if the information you are receiving says that this had been turned over for a government claim chances are it will show up as claim with the Dept. of Education.  When we issue credit for government loans (FHA/VA) we do a separate check on the goverment websites.  If this were to show up especially with all the lending tightening up it would have to be paid in full to proceed.  I know that the government usually lets you set up a payment plan--what the guidelines are I'm not sure.  That really sucks that his mom would just stop paying.  I feel for you guys!!
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LynnInMN
Posts: 465
Registered: ‎06-13-2008

Re: Woah, big trouble with Sallie Mae



UpUpUp wrote:
Thanks, Lynn. I got ya, and while yes, technically it would be his responsiblity, but this is not a dispute about where the bills were sent or having a correct address. This is a crappy situation between him and his mother. He NEVER had a handle on this loan from day one. She applied for it, she paid the payments from day one and has for years. He never had account information or anything the entire time. I don't understand why it was financed in his name to start since this was clearly a typical parent paying for college type of arrangement. Though all of that makes no difference - the damage is done.


Message Edited by UpUpUp on 06-19-2008 10:17 PM

Sounds like they or she  did a FAFSA application and these were the loans awarded.  However, did he sign the prom note? (Electronic signatures have only been around since about 2000...the school I worked at was a test site for electronic signatures for the DOE so most lenders didnt start until after 2001 or later. ) I hate to say it but I have seen this happen many times...parents take over the borrowing process on the student loans....the student signs on the dotted line but never bothers to read their rights and responsiblities.   Loans show up in their student account each year and they dont question it.  They graduate and are clueless.  I would get these borrowers when I was working in collections and they would say "my parents took them out...they are suppose to pay them."  However we would pull prom notes and there would be the students signature.  Right above the signature is a statement in bold print...."THIS IS A PROMISORY NOTE.  I WILL NOT SIGN THIS NOTE UNTIL I HAVE READ AND UNDERSTAND IT"    Sad but oh so true that not many bother to read over the note. 
Yeah mom did a crappy thing and not telling him that she was stopping payments was even worse.  But yes, the damage is done and he now needs to work on damage repair. 
 

 
Ex-Financial Aid Officer

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UpUpUp
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Re: Woah, big trouble with Sallie Mae

[ Edited ]
Thanks to both of you above for the comments.  I had no idea they will do a check for these things if applying for government mortgage. Fortunately, we have found out that the balance owed is not outrageous - it would be a hit for us, but's it's less than $10,000 - so he could pay it off in a pinch if he absolutely had to. That's the down side of this whole thing, it was never about not having the ability to pay, for her or for us, if she had just told him!  If there was some sort of hardship involved on his mom's part, i could understand it, but for crying outloud she just traded in or 2005-06 car (can't remember for sure) for a 2008 and then co-signed for his sibling to buy a new car, too! Money is not the issue, that's why it's so upsetting that she would do this.
 
Lynn, I am almost betting that your scenario is EXACTLY what happened.  He probably was told to sign something and had known that his mom was going to be making the payments (or so we thought), didn't think anything of it, or was too naive to question it and then in the end got scr*wed. This was before 2000 so he would have had to sign something, if it was in the presence of the loan officer. If not, it's very likely that she just scribbled his name and sent it for him. It's just really sad when your own mom can do something like this to you. I think one of the first posters that responded said something like "if you can't trust your mom, who can you trust?" It really stinks. 


Message Edited by UpUpUp on 06-20-2008 09:51 AM
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ivyalmighty
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Re: Woah, big trouble with Sallie Mae

UpUp & Lynn,
 
I was in the same boat. When I went to college, my parents put all kinds of papers in front of me and I signed. I heard FAFSA tossed around, and I knew I was getting student loans but had no idea my parents would put them in my name. Honestly, I didn't even know I could get credit at that point. I think they should make the process so that a student has to sign the paperwork in a bank office, or somewhere where an outside entity can ensure the student realizes what they're signing.
 
I had no idea I had SLs to pay back until I started getting late notices from SM.
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UpUpUp
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Re: Woah, big trouble with Sallie Mae



ivyalmighty wrote:
UpUp & Lynn,
 
I was in the same boat. When I went to college, my parents put all kinds of papers in front of me and I signed. I heard FAFSA tossed around, and I knew I was getting student loans but had no idea my parents would put them in my name. Honestly, I didn't even know I could get credit at that point. I think they should make the process so that a student has to sign the paperwork in a bank office, or somewhere where an outside entity can ensure the student realizes what they're signing.
 
I had no idea I had SLs to pay back until I started getting late notices from SM.


 
Ivyalmighty, that really sucks. I am so sorry this happened to you too. I agree, it seems too easy for this to happen. It should have to be done in an outside entity such as a bank. I hope that your credit was able to bounce back from the lates and the damage wasn't too bad. :smileymad:

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MattH
Posts: 3,245
Registered: ‎04-03-2008
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Re: Woah, big trouble with Sallie Mae



LynnInMN wrote:


UpUpUp wrote:
Thanks, Lynn. I got ya, and while yes, technically it would be his responsiblity, but this is not a dispute about where the bills were sent or having a correct address. This is a crappy situation between him and his mother. He NEVER had a handle on this loan from day one. She applied for it, she paid the payments from day one and has for years. He never had account information or anything the entire time. I don't understand why it was financed in his name to start since this was clearly a typical parent paying for college type of arrangement. Though all of that makes no difference - the damage is done.


Message Edited by UpUpUp on 06-19-2008 10:17 PM

Sounds like they or she did a FAFSA application and these were the loans awarded. However, did he sign the prom note? (Electronic signatures have only been around since about 2000...the school I worked at was a test site for electronic signatures for the DOE so most lenders didnt start until after 2001 or later. ) I hate to say it but I have seen this happen many times...parents take over the borrowing process on the student loans....the student signs on the dotted line but never bothers to read their rights and responsiblities. Loans show up in their student account each year and they dont question it. They graduate and are clueless. I would get these borrowers when I was working in collections and they would say "my parents took them out...they are suppose to pay them." However we would pull prom notes and there would be the students signature. Right above the signature is a statement in bold print...."THIS IS A PROMISORY NOTE. I WILL NOT SIGN THIS NOTE UNTIL I HAVE READ AND UNDERSTAND IT" Sad but oh so true that not many bother to read over the note.
Yeah mom did a crappy thing and not telling him that she was stopping payments was even worse. But yes, the damage is done and he now needs to work on damage repair.






As I said in another thread,
http://ficoforums.myfico.com/fico/board/message?board.id=studentloans&message.id=623#M623 ,

I think there should be a required seminar on Real World 101 as part of the process of applying for student loans.
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803
EX always was my highest when we could pull all three
Always remember: big print giveth, small print taketh away
If you dunno what tanstaafl means you must Google it
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UpUpUp
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Re: Woah, big trouble with Sallie Mae

I agree, Matt. That would be a great thing.

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