Looking for some direction with complicated situation
Date: Fri, 10/17/2008 - 08:46
Looking for some direction with complicated situation
In 1996, I consolidated all of my student loans into 1 with Sallie Mae, totaling ~$30k. The first few years, I admittedly did what I could just to keep them in deferment or forbearance. After a few years, as I aged and matured, I realized I would need to deal with these, and they weren't going to go away. At this time, interest rates were plummeting, and I wanted in. When I contacted SM, they informed me I was stuck with the fixed 9% they had done my loan at. This boggled my mind, that everyone else could get as low as 2%, mortgages could be refinanced, but a student loan could not. The further I researched, I found what I thought to be a possible loophole, which is that these loans were not supposed to exceed 8.25%. At that point, I informed SM that until they were willing to give me a better interest rate, they would not receive a dime.
Soon after this time period, I went thru a divorce. Some of these loans were originally taken out to help out my wife with money at the time. For the most part, I had supported her and her 2 kids (deadbeat dad, wouldn't pay child support). As part of our divorce decree, she accepted responsibility for this student loan (I accepted responsibility for a $200k mortgage). Before someone tells me a divorce decree has no bearing on this, I now know that, just trying to provide a background.
It has been about 7 years since all this took place, and low and behold, guess who came out of the woodwork. I was actually contacted by the guarantor (Texas Guaranty (tgslc)), as SM put my loan into default in January of this year. Somehow, my loan had been continually put into deferment/forbearance for the last 7 years. According to TG, last activity was October last year. I'm not even going to waste my time with having them go after my ex-wife; in the end, they'll end back on my doorstop anyway, so I might as well handle this just to not have to have contact with her again.
I have/had perfect credit (nearly 800 score), have been a model credit citizen for quite some time, and am doing very well for myself. I always pay off interest accruing credit cards/loans (other than obvious mortgage and car loans), but am very interest rate focused. Paying interest is retarded. Sorry if that offends anyone, but I just don't believe paying interest on things is very smart. If you can't afford to pay most balances, you should be responsible to not accumulate the debt. Other than my mortgage, my only interest accumulating debt are my car loans, which are at 1.9% thru GM. Every other debt I have either gets paid in full month to month or is paid over equal payments at 0% interest.
Finally, to my point. My $30k student loan, now sits at $81k. I have had 1 conversation with TG yesterday, offered to pay them the principal amount ($30k) in 1 lump payment, but they only offered to put me in deferment to bring me back current (I am currently between jobs, so I have the unemployed option available right now), or to pay 6 months past due to bring me back current, and that I would then have to deal with SM. SM is a worthless organization, and IMO, need a wakeup call from the government, but that's a whole other thread. How is it possible to not make a single payment on a loan for 12 years, and the loan never be put in default?? I realize I have a responsibility, and I'm willing to take care of that, but SM never even put forth the effort to find me and send me a letter. TG found me in less than 2 months and I promptly responded.
So, I'm sure plenty of detail is missing here, but can someone please guide me into resolving this?? My goal would be to pay the PA of $30k, and be done with this once and for all. I'm sure some lawyer would tell me I could possibly get out of most of this, but I think our country does enough of this (i.e., $700 bil. bailout, mortgage, etc.), I don't need to contribute to a corrupted society. Any advice??
TIA
Looking for some direction with complicated situation
After a couple more hours of reading, in addition to my original post, I have some more direct questions, hopefully "SoapLady" or someone else can accurately answer or give valuable insight to.
- Can I be charged more than 8.25% interest?? My SM consolidated loan (@ 9.00%) consisted of Stafford, SLS & GSL loans. Date of Promissory note is 12/01/1995, though bulk of loans were disbursed in 1991 and 1992.
- When requested, should I have been able to refinance at the lower going rates?? If not, why??
- What do/should I ask for in verification of the last 7 years and how this loan was kept in forbearance/deferment?? TG says someone requested my loan be in this status up until October 2007. Since 2001, it was not me, and I did not authorize anyone to do so. Do I have any recourse for this period of time??
- At the very minimum, if SM can be held for negligence of my account during this period (2001-2008), and unauthorized activity occurred, could I logically ask to have the interest over that period waived or reduced??
- With a $30k original amount, and an $80k balance, what is the best lump payment offer I should expect to be able to offer and get accepted, if I can't get anything changed??
FYI, I received disbursements which resulted in this consolidation loan, from 1991 to 1994. I'm embarrassed to say, in 4 years I completed a whole 22 hours. My understanding is that things have changed, but this is simply a joke, that I could continue to even get these loans, being handed out like candy with no accountability to the lender (gee, sounds a lot like our mortgage crisis, doesn't it?? Where's my bailout?? LOL). I was a very young adult, with no adult guidance and feel I shouldn't have to bare the entire responsibility of these acts IMHO. As stated above, I'm willing to give back every dime the government gave to me, regardless of how I wasted it, but the government's failed responsibility alongside Sallie Mae, should cost them the interest at a minimum. It's what our society has become, everything is negotiable.
I won't even get into how the military screwed me out of my educational benefits, 1 of the main reasons for serving. Apparently back then (1987-1990), going from a reservist to an active duty soldier deleted all Montgomery Bill benefits originally signed under upon entry. That was the biggest reason for most of these stupid loans to begin with. Yes, I'm still bitter, that adults would do this to naive young people, such as myself.
Again, thanks for any insight in resolving this.
- Can I be charged more than 8.25% interest?? My SM consolidated
- Can I be charged more than 8.25% interest?? My SM consolidated loan (@ 9.00%) consisted of Stafford, SLS & GSL loans. Date of Promissory note is 12/01/1995, though bulk of loans were disbursed in 1991 and 1992.
Yup.....found this on the Sallie Mae site...
Federal consolidation loans first disbursed on or after July 1, 1994 from applications received by the lender before November 13, 1997. Formula: Weighted-average rate of interest rates charged on the loans being consolidated, rounded up to the nearest whole percent. A different rate may apply to any HEAL loans included in the consolidation loan.
Keep in mind SLS loans from your time period carried a higher interest rate.
- When requested, should I have been able to refinance at the lower going rates?? If not, why??
You are only permitted to consolidate once. It is the law. And consolidation loan interest rates are based on your original interest rates. Since your original interest rates were high, refining would have been pointless...you had fixed interest rates
- What do/should I ask for in verification of the last 7 years and how this loan was kept in forbearance/deferment?? TG says someone requested my loan be in this status up until October 2007. Since 2001, it was not me, and I did not authorize anyone to do so. Do I have any recourse for this period of time??
Could it have been your ex wife??
- At the very minimum, if SM can be held for negligence of my account during this period (2001-2008), and unauthorized activity occurred, could I logically ask to have the interest over that period waived or reduced??
Sallie Mae has been paid and it out of the loop. You would have to prove the unauthorized activity which this late into the ballgame will be next to impossible. They are not going to go looking for deferment/forebearance papers at this point considering some of these functions can be done over the phone verbally. Can you afford to fight their lawyers?? I doubt it. It would all come down to you were not paying.
- With a $30k original amount, and an $80k balance, what is the best lump payment offer I should expect to be able to offer and get accepted, if I can't get anything changed??
With your credit and a $200k mortgage, you wont be looking at more 100% of your collection fees being waived if that.
Few other things....you are in default and have been so since Texas paid your claim. You no longer have deferment/forebareance options...so unemployment deferment is not available to you. The ONLY way to bring a default current is to resolve it, which means paying it off in full or settling it, rehabbing it or consolidating them again, thus getting your reduced 8.25% interest rate.
Quote:Could it have been your ex wife?? Yes, but the point st
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Could it have been your ex wife?? |
Yes, but the point still remains, she wasn't authorized to, and SM let her or someone else do so. For an organization that touts their horn with privacy policies, they should be held accountable for such errors in judgment.
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Sallie Mae has been paid and it out of the loop. |
Sallie Mae has NOT been paid. I was told by TG that I DID have the option of filing an Economic Hardship. I have the form sitting in front of me from TG. They said filing this would put the loan back into current status, and that I would have to deal with SM from here on out.
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Can you afford to fight their lawyers?? I doubt it. |
You doubt wrong. If I have to and it's less expensive than $80k or what they are willing to settle for in the long wrong, than I will. That's what I'm trying to weigh my options on. I can pay cash for the entire loan, that's not the point. If I was to screw up (and I have), then I would be responsible. If they screw up, they should be held to the same standard. And as I said, everything is negotiable. They are being paid to "service" my loan. If they do not provide such service, then should not be paid as such.
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With your credit and a $200k mortgage, you wont be looking at more 100% of your collection fees being waived if that. |
I'm unclear what you are stating here, but I don't have a $200k mortgage (or collection fees), I HAD a $200k mortgage after my divorce. My mortgage is substantially larger now. Keep in mind, for the last 7 years I wasn't aware I still had a loan sitting out there I was responsible for. Please don't take any of this as being arrogant, I'm just trying to set the proper environment of the situation. Everyone should be entitled to the same rights, regardless of wealth or poverty.
Sallie Mae is just another government garbage organization, and they pry on people who can't defend themselves when they don't do their job. I'm not one of those people, and I'm trying to gather all the facts I can in order to resolve this in my own best interest. I appreciate the feedback, but have one last question.
With your background, what is a realistic "payoff" amount should I be able to negotiate?? And can I only do so with SM, or is TG an option as well?? I have no interest in doing anything longterm with SM, so a "settlement" is all I'm willing to do. If I need to reach a more "default" status to do so, then I will. I've already successfully removed them from 2 of the 3 credit bureaus, I'm not concerned from that standpoint.
Again, your insight is appreciated. TIA
If your wife called in believing herself to be the responsible p
If your wife called in believing herself to be the responsible party for the loan, or identifying herself as your wife, then Sallie Mae did nothing wrong.
As a general rule of default, if the guarantor is contacting you, the guarantor has paid a default claim which would mean that the lender/servicer is in fact paid off. If you have a current copy of your credit report, you should be able to see "goverment default claim paid" or something to that effect
Having an economic hardship paper sitting in front you you on a default really means diddly....it means that that they wont place you with a CA for awhile. However your interest still continues to accrue and be capitalized.
In terms of a settlement, they will look at your credit and your assets. You will get less of a settlement if you have good credit and have assets that can pay the loan on. In terms of a settlement, they will at most waive your collection fees. Principal (which includes interest accrued up to and capitalized interest up to your default date) and interest accrued since your date of default is generally not negotiable. Keep in mind that the negative information will remain on your credit report until it ages off, seven years from the date of default.
FYI....Sallie Mae is not a government organization. The company began privatizing its operations in 1997, a process it completed at the end of 2004 when the company terminated its ties to the federal government.
Looking for some direction with complicated situation
Well, I have an idea of how the ex took care of the forbearance/deferment, and it's forgery, an obvious one at that. Something SM should have picked up on. Plus, at some point Sallie Mae should have recognized that a loan had been deferred for 12 years, and that maybe they should do something, or question what was going on. I'm pretty sure 12 years is beyond the allowable limit of any cumulative deferment or forbearance.
As for whether the guarantor has paid the loan, the hardship form I have was sent to me from TG and they stated to me to fill it out so the loan could go back to current and back to SM. Also, the paper I received to contact them states: "If you contact us before we pay this claim, we can help you". I'm pretty confident they have not paid it yet, and I know they have not reported anything on my credit.
So, you're telling me that I've worked my butt off the last 10+ years fixing my credit from young adulthood mistakes, and becoming a responsible individual, just to cost me now?? Not saying you're wrong, but that's a bunch of BS, and should have no factor in difference of settlement. And we wonder why this country in is a so-called financial crisis.
If Sallie Mae no longer has ties to the federal government, how can they use the backing of a federal agency to support their loan??
I appreciate your input and your feedback. Have a nice weekend.
In terms of deferment, you technically had 2 sets of loans.....y
In terms of deferment, you technically had 2 sets of loans.....your loans as GSL'S, SLS's and then your consolidated loan. Both come with there own set of deferment priveleges so there was nothing for SM to pick up on. 12 years of deferment is not all that uncommon.....stupid maybe, but not uncommon.
What your wife might of done may have been forgery however there would not put SM at blame. The liablity would be on yours and your ex's shoulders.
Banks all over this country are lender/servicers for the stafford loan program, as just like Sallie Mae. Sallie Mae does not lend for the federal government....they lend/service loans for FFELP guarantors like Texas Guaranteed Student Loan program, USA Funds etc. The loans are federally insured...really not unlike FHA mortgages. So if your loan does in fact go back to SM, you will be stuck with the entire balance. SM as a lender servicer has no obligation or incentive to settle your account as the entire balance is guaranteed by Texas Guaranteed. You can only settle on a insured student loan when in default....and even then the guarantor is no obligation to waive anything.