topic Re: Speed up reporting on consolidated (defaulted) student loan? in Student Loans

Speed up reporting on consolidated (defaulted) student loan?

tlavery — Fri, 16 Jun 2017 20:21:47 GMT

Hello,

I am getting a student loan consolidation to get it out of default. Once it is complete what is the fastest way to get the US department of education reporting to reflect that the loan is no longer in default? I was considering doing a dispute on it as soon as I have the loan papers in hand and can send them to the credit bureau. Has anyone got any other ideas?

Re: Speed up reporting on consolidated (defaulted) student loan?

Anonymous — Mon, 19 Jun 2017 17:14:50 GMT

Like you I applied for a Consolidation Loan to get 2 small loans out of default. I received notice from the new servicer the loans were cnsolidated on 6/12/17, however, my original lender only shows 3 of my 11 loans paid off...the defaulted ones are still showing as "default" on NSLDS website. I assume it takes a few weeks for the disbursements to update online, and possibly another 2-6 weeks to update on our credit report.

However, log on to your account with the defaulted student loan servicer, and check for the "payment history" to see if your loans have been paid. As soon as you see them, download or print a copy of the payments showing the $0.00 balance. I would download a copy of all your loan info while you have access still and save for your records.

My default is handled by the Default Resolution Group. A phone rep advised me to send a copy to show the loans have been paid and consolidated (you'd think they can check their own rcrods), and a letter to ask them to "update" the information reported on my credit file. I plan to do just this

If it doesnt work, I will send a 2nd letter to remind them "as the "furnisher" they have a duty to "correct" and "update" info to CRA's regardless of whether the furnished info was accurate at one point" under FCRA §623(a), and hope that THIS will at least work.

I am giving it till July 12, 2017, the date my 1st payment is due then I may dispute it with the CRA's if my accounts have not updated yet.

Re: Speed up reporting on consolidated (defaulted) student loan?

tlavery — Mon, 19 Jun 2017 23:00:47 GMT

Thank you for the reply. How long did you wait from the time you applied until it was completed? I was told that I could speed up having it approved by asking them to waive the 10 day period that they give me to make any changes to the loan. Did you do that or did you wait the 10 days?

Re: Speed up reporting on consolidated (defaulted) student loan?

Anonymous — Mon, 19 Jun 2017 23:54:49 GMT

That is what I did. I waived my "waiting period" and regretted it the next day. Literally! I stupidly had them add my oldest loan to the consolidation and didn't consider the effects on my credit score when my oldest accounts are closed. I realized what I had done but was told I was now locked in b/c I waived my waiting period.

I waived my waiting period on Wed. I received the final documents with the repayment plan for 2017 by Fri. By Mon. the loans were paid. By Thurs. I saw 3 of my loans were paid, $0 balance, with "consolidated" notated by each payment. It's been 1 week and still waiting for the rest of the loans to update as "paid" now. Haven't checked today yet though.

Re: Speed up reporting on consolidated (defaulted) student loan?

tlavery — Mon, 19 Jun 2017 23:58:26 GMT

What date did they actually receive the consolidation application?

Re: Speed up reporting on consolidated (defaulted) student loan?

Anonymous — Tue, 20 Jun 2017 01:40:09 GMT

They received my application 5/19/17.

Just confirmed my defaulted loans were paid off on 6/12/17. Navient seems to be dragging their heels with updating my account of all the payments they received.

Re: Speed up reporting on consolidated (defaulted) student loan?

tlavery — Tue, 20 Jun 2017 01:43:00 GMT

So the new servicer sent you a notice saying the loans were paid? Would they be the one to give you a default clearance letter or would that be whoever had them before consolidation (navient)?

Re: Speed up reporting on consolidated (defaulted) student loan?

Anonymous — Tue, 20 Jun 2017 02:38:59 GMT

I was told to request it from the previous servicer (whoever is actively reporting the default)...in my case my defaults has been with the Dept. of ED "Default Resolution Group". So I would send a letter or give them a call. Be aware though...see how its reporting on your report now and decide if its necessary to contact the old servicer or whether its best to wait a bit and dispute it directly with the CRA's.

*This is just my opinion though so hopefully others will share their experiences.

I am not very hopeful I will have much success with the DOE though. I just now read that consolidating the loans will NOT mean the "derogatory" will be removed BEFORE it's due to fall off. Only those who have "rehabilitated" defaulted loans can have tthe "credit killer" marks moved before it falls off. Sadly no one tells us this before hand! That should have been in the Consolidtion Loan application terms and conditions and I would have just rehabilitated first.

If the default is actively reporting monthly now, than yes, maybe its best to contact the servicer versus the CRA later. However, in my case, my defaulted loans are listed as "closed" since 10/26/16, and "IIB". My score and file are ok for now that I dont want to rush into it and cause a significant score drop or negative report change by requesting the DOE to even look at my credit file, lol.

I may wait to see IF and WHAT, if any, the DOE reports now that the loans are paid. Unless they update and it's hurting me, I am thinking I may wait a few months, maybe longer, and then dispute it directly with the CRA's in hopes that they will just remove the negatives after receiving the documentaiton of the consolidation.

Again, I am just sharing what my thoughts are now that I know I may have a hard time getting the "derog's" removed EVEN THOUGH the phone rep at DOE advised me send them my paperwork to have them update my credit file.

Re: Speed up reporting on consolidated (defaulted) student loan?

Anonymous — Tue, 20 Jun 2017 02:43:32 GMT

So far, the loan servicer's always make it seem like sending a letter and proof will easily get us the results we are hoping for...but not even 1 servicer has removed, updated, or corrected anything. I am just going to keep being persistant and hope to get somewhere.

Re: Speed up reporting on consolidated (defaulted) student loan?

tlavery — Tue, 20 Jun 2017 03:06:42 GMT

@Anonymous wrote:
So far, the loan servicer's always make it seem like sending a letter and proof will easily get us the results we are hoping for...but not even 1 servicer has removed, updated, or corrected anything. I am just going to keep being persistant and hope to get somewhere.

Oh Boy! Yeah, after reading your post I visited the student aid website and sure enough it said it will not remove the default from the credit file. So I just shot my loan officer an email asking him if a consolidation to get it out of default will be enough to get us a mortgage or if we need to pay the 9 monthly payments to rehabilitate it. Nothing is ever easy when you do not pay your student loan!

Re: Speed up reporting on consolidated (defaulted) student loan?

wife2froggy — Thu, 17 Aug 2017 16:37:05 GMT

Oh Boy! Yeah, after reading your post I visited the student aid website and sure enough it said it will not remove the default from the credit file. So I just shot my loan officer an email asking him if a consolidation to get it out of default will be enough to get us a mortgage or if we need to pay the 9 monthly payments to rehabilitate it. Nothing is ever easy when you do not pay your student loan!

If my experience means anything...

I paid my 9th rehab on July 15. Aug 1 it landed with the new servicer. 1st payment due Aug 7. (they notified me via email, I have yet to recieve a letter, very glad I check my emails regularly.) After first payment posted I applied for consolidation. Aug 16 the DOE deleted collections from EX, EQ, still waiting on TU.

I chose to go the rehab route to get the negs pulled upon completion. I am also going the consolodation route because I have 7 loans and the minimum payment is $50 per loan and I'd rather have the lower payment to not kill my DTI.

Loans are with FedLoanServicing - they claim they update at EOM and at that point all negs will flip to "current, pays as agreed" dated back to 2013 when the defaults went into place.

Hoping this all goes smoothly as we are really ready to pull the trigger on a mortgage application.

When we asked the LO about applying during rehab she said wait until it's cleared before applying.

Not quite on topic but my main point was consolidation will be a better option for us AFTER rehab due to the number of loans.

Re: Speed up reporting on consolidated (defaulted) student loan?

Anonymous — Fri, 15 Dec 2017 09:07:44 GMT

Wifey2froggy,

Was it smooth sailing going with FedLoans? Was it everything you expected with the negatives turned around?

Re: Speed up reporting on consolidated (defaulted) student loan?

wife2froggy — Fri, 15 Dec 2017 12:54:46 GMT

Hi UsoDak,

A little update on this...

So FedLoan took nearly 2 months to consolidate my loans, as compared to my husband's at Navient who took less than a week.

FedLoan left my 7 neg accounts, added 7 new accounts as "good, paid in full" and the new single consolidated loan. All US Dept of Ed negs were completely deleted.

It helped my average age of accounts but didn't help with the number of negs reporting. The new consolidated loan didn't hurt other than now one of my reasons for the score is "remaining balance on mortgage or non-mortgage loans is too high."

The FedLoan website is fairly straightforward and I have my loan on auto pay. I've had to call a couple of times and they've been pleasant to speak with.

The positive on the negs is that all the balances now report zero, even though they are still stamped with 120+ days late. My fault, I'll just have to eat it until they fall off end of 2019.

They didn't stop me from getting my mortgage - my DTI was super low.

I think if I'd waited to consolidate there's a possibility the existing negs may have just been brought current but I was in a hurry to consolidate so I could start the ball rolling on the mortgage process. I'll never know

It does seem like FedLoan takes FOREVER to update reporting though. They say monthly but it seems more like quarterly.

Re: Speed up reporting on consolidated (defaulted) student loan?

Anonymous — Fri, 15 Dec 2017 16:55:13 GMT

Thanks for taking the time to respond back, greatly appreciate it. Looking forward to getting my loans taken care of. I have 26 that defaulted and my consolidated loan payments start this month. My total school loans are $90,000, is yours anywhere near this amount? And was your mortgage based on 1-2% of your total school debt or just what your payments were? My payments are income based at $39 a month and I’m looking to hopefully qualify for a mortgage loan in 2 years.

Thanks again.

UsoDak

Re: Speed up reporting on consolidated (defaulted) student loan?

wife2froggy — Fri, 15 Dec 2017 17:03:20 GMT

Hi, no my loans totalled about $24000 and I'm doing standard repayment.

If I'd left them unconsolidated it would have been $350/month for probably less time but with standard on consolidation it's $173/month for 20 years.

FedLoan has a mortgage verification letter you can download right on the home page and it will tell the lender your total debt and monthly payments. I'm assuming because it's a set debt that the actual payments are what they used to calculate my monthly DTI.

In your case, and this is only an assumption, but they will most likely use the 2% rule for your DTI because you're on IBR and that can change at any time.

Re: Speed up reporting on consolidated (defaulted) student loan?

virgo — Wed, 27 Dec 2017 00:07:21 GMT

Have an unusual SL situation. Apped to get SL to enter masters program. School tells me I have outstanding SL. Call default dept. and am told it is from 1986. No typo. I remembered the situation and at the time complained about the school and that i didnt attend long enough for school to keep the SL. Believe, the amount is quite small. So I have a SL from 1986 in default. Rather than continue to fight with ED, I am thinking of payments to bring it out of default in hopes that it will report on my CR's and bump my AOA. It has never appeared on my reports.

Am I overthinking this? Any thoughts are appreciated.