Loan Rehab

[xkaosx]

Ok so I think I finally found out what I need to and just wanted to run this and see if anything looks weird.

My Original loan was through Wells Fargo which Sally Mae bought out.

USA Funds bought the Sallie Mae loan out and is the current holder of the debt. (Pioneer was the actual name of the place but they said they reported under USA Funds)

They offered me the 9 month rehab program and after the 9 months all 4 of the USA Funds would be removed from my report and the Wells Fargo and Sallie Mae would report as current and paying.

They required me to do an ACH straight from my checking for $150 a month.

(I mentioned I wanted to get something in writing and was out of the office and would call them when I got back so they could fax me something and they threw in a threat that they sent a garnish notice a month before but since I was doing this I wouldnt have to worry about it.)

Any thoughts?

[Anonymous]

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xkaosx wrote:

Ok so I think I finally found out what I need to and just wanted to run this and see if anything looks weird.

My Original loan was through Wells Fargo which Sally Mae bought out.

Sallie Mae was your loan servicer

USA Funds bought the Sallie Mae loan out and is the current holder of the debt. (Pioneer was the actual name of the place but they said they reported under USA Funds)

USA Funds paid your default claim.  Pioneer is the CA handling the account.

They offered me the 9 month rehab program and after the 9 months all 4 of the USA Funds would be removed from my report and the Wells Fargo and Sallie Mae would report as current and paying.

Incorrect.  Per the Higher Education Act, only the guarantor is required to adjust the tradelines.  Neither the WF or SM tradeline will change

They required me to do an ACH straight from my checking for $150 a month.

(I mentioned I wanted to get something in writing and was out of the office and would call them when I got back so they could fax me something and they threw in a threat that they sent a garnish notice a month before but since I was doing this I wouldnt have to worry about it.)

They are not going to send you anything in writing that could be interpreted as a payment arrangement.....that would be in violation of the prom note agreement you have.    This is standard for all CA's.

Any thoughts?

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Message Edited by LynnInMN on 08-05-2008 04:07 PM

Message Edited by LynnInMN on 08-05-2008 04:08 PM

[xkaosx]

so pretty much I should shut up and do it?

[Anonymous]

It you were already in the garnishment phase, I woulld say you got off pretty easy.

[xkaosx]

they said they sent a letter to my current address back on july 15th and of course i never received a letter. I think it was just a bit of scare tactic. Im going to do it anyways but thought it was kinda funny

[xkaosx]

By signing below, I understand and agree that the lender may capitalize collection costs of18.5% of the outstanding principal and accrued interest upon rehabilitation of my loan. I also understand and agree that the lender may capitalize any outstanding accrued interest at the time of the rehabilitation.

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Someone have an english translation please?

[Anonymous]

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@xkaosx wrote:

By signing below, I understand and agree that the lender may capitalize collection costs of18.5% of the outstanding principal and accrued interest upon rehabilitation of my loan. I also understand and agree that the lender may capitalize any outstanding accrued interest at the time of the rehabilitation.

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Someone have an english translation please?

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Essentially, by signing that, you've agreed that they CAN add 18.5% of the loan onto the "final balance" for collection costs.

It also means that you're agreeing to pay the capitalized interest on the loan that's accrued since it defaulted AND the collection cost (18.5% of the loan amount ADDED to the "balance" ) AND the original loan with the original capitalized interest.

F'rexample: Our loan was originally for $23K. After taking two years forbearances AND being spotty with our payments (going over 120 -- though 90 was the usual -- days sometimes, then paying oodles in a futile effort to catch up), we've ended up at, with capitalized interest (8%), a final balance of $52K. That's with NO collection fees.

Not fun.

What are the numbers in your case??

Message Edited by Wonderin on 08-06-2008 10:44 AM

[Anonymous]

You don't have to agree to a automatic withdrawal from your checking account to enter into a rehab program. You can send the payment directly to them, and I believe (and please verify) there is a 5 day grace period for payments. Also the 9 monthly payments are negotiable, depending on your loan amount and what you can afford. I remember when I did the rehab, the collection agency (OSI)threatened me with wage garnishment. OSI wanted me to consolidate my loans instead of rehabbing them. I immediately contacted a lawyer. I didn't try to negotiate my payments, I just payed what they offered for 12 months and I mailed my payments in (certified mail of course) every month. This was about 9 yrs ago though. I know of others who I encouraged to rehab their loans, who only paid $50 a month. Remember collection agencies always want access to to pull money directly from your checking account. I just have never felt comfortable with that, and refuse to do so with any collection agency.

[xkaosx]

woops

The amount they have is around 8600. So I can negotiate not to have it taken from my account or anything?

[Anonymous]

ACH is always recommended for the rehab program.  With you being pulled from garnishment, all it would talk is a payment go missing in the mail and pow!, your wages can be garnished.

ACH is quite safe with student loan CA's  They are not going to empty out your bank account as they are not going to risk loosing multi million dollar contracts for the amount that is in an average persons bank account.