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Interesting situation.. need a little guidance


The last post in this topic was posted 1023 days ago. 

 

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So I've gotten help from the board on to pay/not to pay on some collections etc.

 

Other than a couple of collections on my report right now. I have the following positive lines:

 

3 Credit cards totalling $1,800.00 available. Have been running a balance on them but I figured out the reporting dates, and I'm making sure they are below 5% each month

 

Car loan starting in Jan 18. All current. Positive.

 

The one nagging issue is this:

 

I have a note on a car (5 years) with a local bank. During the time of the loan for some reason the Bank wasn't added (or showing) on the insurance policy, so it wasn't reporting to the bank that we had insurance (we did)

 

Had some late payments during this loan term, but never really paid attention to the balance on the loan. Starting the beginning of this year, I really made sure we were current on payments, I knew the loan was due to be paid off in April. April comes, I get a call from the bank, and lo and behold, the balance on the loan is $31,000 (just $4k shy of what we borrowed 5 years ago) WTF? So I start digging into it, and the bank over the years had just added the crazy expensive insurance onto the loan every six months.

 

I have submitted all the proof of insurance and they have been working on crediting these periods back to us. Hopefully it's quite a bit.

 

The problem: In the meantime, I've been making 3-4 payments a month just to make sure we stay way in front of this situation and ensure that everything is reporting current. I get a notice from Experian that my score dropped 30 points a couple days ago. This bank is reporting that the loan is now 60 days past due, and was 30 days past due last month. What the....??

 

I call the loan officer. He checked into it, and said basically.. the loan matured at end of March, and the bank didn't extend it. So even though they can see that we are ahead on payments, they are reporting that the entire balance was due end of March, and are showing that the whole balance is 60+ day past due right now.

 

I asked for a goodwill adjustment (because of the situation) he said there wasn't anything they could do, because the Bank wasn't "in error".

 

Last ditch effort tomorrow to talk to the regional manager and see if they will effectively "extend" the loan retroactively for me. And then maybe adjust the reporting accordingly.

 

What do you guys think? Any other options here?

 

(By the way, once the insurance adjustments have been made, we'll be selling the car and paying it off in full)

 

Thanks

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GW in writing might be your best bet but check out state laws covering closed-end loans like this as well as your state's insurance commissioner's office.

 

what notice were you sent about the insurance being applied? did the loan contract (or state law) require you be notified?

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This is a tough situation for sure, but going years and years without even checking a statement seems negligent to me. So while the bank didn't do you any favors, you can't really blame it all on them.

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Had some late payments during this loan term, but never really paid attention to the balance on the loan. Starting the beginning of this year, I really made sure we were current on payments, I knew the loan was due to be paid off in April. April comes, I get a call from the bank, and lo and behold, the balance on the loan is $31,000 (just $4k shy of what we borrowed 5 years ago) WTF? So I start digging into it, and the bank over the years had just added the crazy expensive insurance onto the loan every six months.

 

 

You are referring to what is known as CPI, Collateral Protection Insurance. It effectively is an insurance policy the lender places when they are notified of a loss of insurance coverage on their collateral. It is an ungodly expensive policy, that borders in my opinion on extortion. I went through a similar experience last year, except in my case the lender was not accepting my State Farm policy. I never had to pay for the CPI, but it was a 5 month protracted battle where I wound up refinancing with another lender because I grew tired of the headache.

 

One thing is certain, unless your lender is Wells Fargo, lenders will notify you roughly 30 days in advance of CPI being placed on a loan. Wells was recently found guilty of placing CPI on auto loans an not notifying customers as well as refusing to remove it when appropriate coverage was in place. The take away is that you are the only one who will look after your own interests. Never trust banks! The only way to protect yourself is to check all of your financial statements monthly.

 

Nevertheless, since you can provide insurance, and hopefully for your sake, for the entire term of the loan, you will be entitled to a full refund of all CPI and interest. Late fees, well that is another story. As other have suggested, try a well-writted GW letter and plead your case.

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Also it’s on the borrower to ensure the lien holder is the beneficiary of the insurance policy. The insurance companies notify the banks of the coverage. This is not all on the banks.

Right. I totally understand that. That was more for background on the situation. I take responsibility for not making sure that was done. My main question has to do with finding a way to have them report the loan as current until we pay it off or sell etc...

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This is a tough situation for sure, but going years and years without even checking a statement seems negligent to me. So while the bank didn't do you any favors, you can't really blame it all on them.

Yup agreed. However, I'm not bitching about the loan balance or blaming them per se. More trying to find a constructive way out of this so that they can legally (and within their rules) report this loan as current. As others have suggested, I may try a GW letter. Last ditch effort I guess.

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