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JTorrap

Furnishers Required To Confirm Contact With Borrowers Prior To Reporting?

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Newbie here and really would appreciate some help with a problem I brought on myself ;(

 

I had a 742 FICO before my kid's student loans came out of deferment. I applied to refinance our home and abruptly learned the loans were 90+ days delinquent. I immediately paid the outstanding balance and contacted the servicer to detail what happened and ask for a one-time goodwill adjustment. Citing the FCRA, they have declined my requests repeatedly. 

 

MY QUESTION: Are there requirements of data furnishers to make/confirm positive contact (ie: certified mail, priority, recorded phone calls, etc) with consumers before reporting derogatory data to the CRAs? I know there are timing requirements for specific notices, but are there requirements to ensure the notices reach the borrowers? Specifically, I never received any correspondence by mail to our current address UNTIL after I called them about this mess AND after I unchecked the 'paperless billing' option in their borrower portal. We have moved twice in the past 1.5 years and they claim to have had our current address updated before this delinquency occured, but I have no way of confirming. Additionally, the 'paperless billing' option was enabled when I logged into the account for the first time. I have since disabled the option and receive monthly invoices regularly now.

 

They had previously communicated with my wife via email, but just before the loans came out of deferment my wife ceased getting email due to account issues. They also claimed to have called me but I seldom answer unrecognized phone numbers and messages were never left. These sound far-fetched and ridiculous, but as God as my witness, I never received any mail from them at all until I called them to discuss this debacle. I have extensive trendlines and good credit history to suggest I speak the truth. I sent them my credit report, 9 letters detailing what happened and 3 phone calls asking for a one-time adjustment, but can't get past a FCRA-boilerplate response from them.  Even sent the executives a letter and email to their corporate accounts.

 

The loan is my obligation and the delinquency was my fault. However, I would think data furnishers should have an obligation to reasonably exhaust all available means of communication with consumers prior to reporting derogatory data. Had they sent regular mail, or even certified for positive service, this never would have escalated.

 

Any constructive help or direction would be greatly appreciated!!

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No, there is no requirement of having confirmed contact prior to reporting.  But by your own statements here, they made multiple efforts at contact.  It is not THEIR responsibility for a borrower who won't answer the phone or who changes the email without notifying them.  With regard to the loans, if they were in your name, what steps were you taking after no other documents related to the loan were being received? 

 

If the loans were actually in your child's name and you were only a co-signer, then notice would not have been required to have been sent to you and you need to have a serious conversation with said child about fiscal responsibilities.  You ALSO should contact the Ombudsman for the loan entity and get the account into a 'rehab' status.  This is a once in the loan's lifetime sort of a deal, BUT upon completion of the rehab process, the derogatory reporting is wiped from the report under relevant provisions of the student loan codes.  You MAY have forfeited the opportunity on THESE derogatory notations since you already brought the account current.  There is a lot more information about student loans in the student loan sub-forum here. 

 

 

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3 hours ago, centex said:

You ALSO should contact the Ombudsman for the loan entity and get the account into a 'rehab' status.  This is a once in the loan's lifetime sort of a deal, BUT upon completion of the rehab process, the derogatory reporting is wiped from the report under relevant provisions of the student loan codes.

 

 

Just want to note that rehabilitation is a remedy for federal student loans that have been declared in "default" (typically defined as having fallen behind on payments by 6 to 9 months).  It's unlikely that it would be wise to intentionally default on a student loan in order to take advantage of rehabilitation remedies.

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58 minutes ago, hdporter said:

 

Just want to note that rehabilitation is a remedy for federal student loans that have been declared in "default" (typically defined as having fallen behind on payments by 6 to 9 months).  It's unlikely that it would be wise to intentionally default on a student loan in order to take advantage of rehabilitation remedies.

Hence my additional comment about the opportunity potentially having been forfeited.  But the guidance to contact Ombudsman remains given that they are the office that actually has the discretion AND ability to potentially modify the reporting.  Depending on the specific lender, they COULD be helpful provided OP approached them in a proper fashion...

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Thank you Centex and hdporter for your candid responses.

 

The loans were 96 days delinquent. I immediately paid the past due balance upon learning of this mistake, so rehabilitation is not an option. 

 

To your point Centex, I was fiscally irresponsible by trusting my wife and two adult kids to monitor the account while I ran a business. Definitely learned a lesson here.

 

The loan servicer had/has an email, a phone number and our current mailing address for point of contact. They used the email and phone for contact attempts, but did not send correspondence via mail. Had they sent correspondence by mail I would have received it. I believe the enabled 'paperless billing' option negated contact attempts by mail.

 

So, should furnishers not be obligated to contact borrows by all means available to them prior to reporting derogatory data? Legal proceedings cannot proceed without positive service, so how can data furnishers submit derogatory entries without using all available means of contacting the borrower?      

Edited by JTorrap
added content

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37 minutes ago, JTorrap said:

So, should furnishers not be obligated to contact borrows by all means available to them prior to reporting derogatory data? Legal proceedings cannot proceed without positive service, so how can data furnishers submit derogatory entries without using all available means of contacting the borrower?      

 

I fully grasp your frustration.  Litigants are simply held to a higher standard than creditors.  One might say that the "system" presumes that debtors are aware of their debt and, ultimately, are the ones responsible for seeing that it's satisfied.  Whatever the case, unless otherwise provided for, the onus is absolutely on the debtor to ensure that their debts are satisfactorily handled, irrespective of lapses on the creditor side.  (Obviously, the "unless otherwise provided for" aspect is largely detailed in the Fair Credit Billing and Fair Credit Reporting Acts.)

 

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1 hour ago, JTorrap said:

So, should furnishers not be obligated to contact borrows by all means available to them prior to reporting derogatory data? Legal proceedings cannot proceed without positive service, so how can data furnishers submit derogatory entries without using all available means of contacting the borrower?      

Where electronic communications or paperless options have been enabled, then there would be no obligation to send anything by snail mail other than, perhaps, the annual privacy notice like goes out with credit cards.  My student loans predated all THAT nonsense.

 

However, you overlook that positive service is NOT required prior to litigation going against a defendant.  ALL sorts of cases are resolved via alternate service having been performed...many a thread have existed in these forums precisely because of claims of default judgments having been obtained through alternate service. 

 

I get that it is frustrating, but the reality is that, from what has been offered in this thread, they made efforts to contact, which is more than is required to report...while I disagree with some posts that appear on CB on the subject, there have been some that advance a position that courts have ruled that notice was not required before reporting a derogatory notation.  Most of those situations involved third-party reporting, but the other reality is that reporting of student loans is probably addressed in the original Agreement to which the parties agreed to at the time of application and subsequent disbursement.  It would potentially be a different scenario if they ONLY reported once in default, but MANY borrowers have student loans reporting that NEVER went into default (their biggest complaint is generally that they have far too many dollars reporting since they took more than was necessary). 

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4 hours ago, JTorrap said:

...

 

So, should furnishers not be obligated to contact borrows by all means available to them prior to reporting derogatory data? Legal proceedings cannot proceed without positive service, so how can data furnishers submit derogatory entries without using all available means of contacting the borrower?      

 

No.  You are SOL in that regards.  You are wasting time with that approach.

 

If that had happened to me, there would be restraining orders ... against me ... after beating the holy sh!t out of my wife and kid for screwing up like that.  You learned an expensive lesson.

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27 minutes ago, PotO said:

 

No.  You are SOL in that regards.  You are wasting time with that approach.

 

If that had happened to me, there would be restraining orders ... against me ... after beating the holy sh!t out of my wife and kid for screwing up like that.  You learned an expensive lesson.

yup. never under-write someone else's liabilities...

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Okay, thanks for all feedback.

 

Can anyone recommend a good (unbiased) credit repair agency/attorney?

 

Any (productive) ideas please???

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2 hours ago, JTorrap said:

Okay, thanks for all feedback.

 

Can anyone recommend a good (unbiased) credit repair agency/attorney?

 

Any (productive) ideas please???

There are no good credit repair agencies.

 

why would you need an attorney? To sue your child?

 

have your GW requests been in writing? If not, I'd try reaching out to executive offices at the servicer

 

 

 

 

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I have seen some attorneys soliciting credit repair services- only reason I mentioned it.

 

Yes, I have written several GW letters to the company and the (3) execs as well- both snail mailed and to their personal corporate emails. I have owned the mistake, explained in great detail what happened, sent them my credit report to indicate my sincerity/integrity and always polite & professional.  In turn I receive a boilerplate letter stating their obligation to FDCR compliancy.

 

I have the executive's home addresses and personal emails; considered sending a final GW request but not sure if this would cause irrefutable damage if/when I contact the Fed Student Aid Ombudsman as a last effort?  

 

They did tell me in a phone conversation last month they could remove the derogatories if it was determined a mistake was made on their behalf. This prompted my questioning of any obligation they had in communicating with the debtor before reporting.

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31 minutes ago, JTorrap said:

I have seen some attorneys soliciting credit repair services- only reason I mentioned it.

 

Yes, I have written several GW letters to the company and the (3) execs as well- both snail mailed and to their personal corporate emails. I have owned the mistake, explained in great detail what happened, sent them my credit report to indicate my sincerity/integrity and always polite & professional.  In turn I receive a boilerplate letter stating their obligation to FDCR compliancy.

 

I have the executive's home addresses and personal emails; considered sending a final GW request but not sure if this would cause irrefutable damage if/when I contact the Fed Student Aid Ombudsman as a last effort?  

 

They did tell me in a phone conversation last month they could remove the derogatories if it was determined a mistake was made on their behalf. This prompted my questioning of any obligation they had in communicating with the debtor before reporting.

 

There are several lenders who always cite that FCRA crap.  The FCRA does not force them to report or to not stop reporting.  It just says that when they do report, it must be accurate.  What you want them to do is simply not report something.  It's perfectly ok.

 

Some folks have success by just badgering the hell out of them.  Sooner or later they might capitulate just to shut you up.  Or, then again, maybe they won't.  You never know unless you try.

 

From what you've posted, they did not commit any errors at all.  The only one who screwed up is, unfortunately, you.  

 

I know nothing about the Ombudsman.  I can't say whether it is a good idea or not.  

 

Anybody in the credit repair business is a scumbag.  Anybody.  Everybody. When they file frivolous disputes and you end up losing your money plus put in Special Handling, you will regret it.

Edited by PotO

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mailing something to a home address is a terrible idea. try the ombudsman's office. Perhaps then try GW again every 6 months. Have you educated your child on the need to make the monthly?

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10 hours ago, JTorrap said:

I have seen some attorneys soliciting credit repair services- only reason I mentioned it.

 

The fact that someone with a Bar card advertises does not mean they are GOOD at what they are advertising.  The reality is that they are looking for a fee to be collected.  Generally speaking, when counsel is good at the area of expertise, advertising is not needed.  The business comes through word of mouth, whether by referrals from satisfied clients or from other attorneys that know the skills.  My practice falls into that category (I don't do credit work but instead work in a State-specific niche area of post-conviction defense).  We did get our website back up earlier this year but went close to two years without a functioning website.  No billboards and no television ads.  Still, enough business that we turn away some prospective clients...

 

With respect to credit work, you are not going to find someone that takes the case on contingency.  This means you would be fronting the fees and could expect to see invoices of at least a few hundred bucks per hour.  The ONLY way you get those funds back is if the case actually goes to trial, you prevailed AND the Court entered an Order that also granted costs.  Since most litigation settles outside of court, you would not have such an Order.  Outside of someone who is about to make a high-dollar purchase where an extra point or two of interest generates real costs, you won't have damages that warrant spending a few thousand on counsel and competent counsel is going to tell you the same thing when you call them.  This is not to say that you would not also find offices that will take on any case where someone is willing to write a check for payment...

 

You may also want to explore an option in your goodwill letters whereby you seek to let them continue to screw the kid by reporting but instead delete it from your record.  I would ALSO demand that the child immediately take steps to refinance the loan so that their future irresponsibility impacts only them and NOT you...

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Your all correct.... I did screw up. I have learned an expense lesson. I have owned it many times through many letters sent to them. 

 

I have requested human understanding of my error, sent a credit report to illustrate this was a first-time and uncharacteristic mistake and asked for another chance. I did not receive mailed correspondence from them, and erred in the belief this is how I would have been contacted if there was a problem.   

 

Any suggestions on how to work with the Ombudsman? The loan servicer even suggested I contact them, but prefaced it by saying "in the six years I've been here, I've never seen the Ombudsman overturn a reporting decision by us".    

 

It's been quite the humiliating and humbling experience....

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I understand the pain and frustration. Don't beat yourself up over it. Like I suggested, trying for GW every 6 months or so might be worth the stamp. You never know when a servicer will change its policies.

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9 hours ago, JTorrap said:

Your all correct.... I did screw up. I have learned an expense lesson. I have owned it many times through many letters sent to them. 

 

I have requested human understanding of my error, sent a credit report to illustrate this was a first-time and uncharacteristic mistake and asked for another chance. I did not receive mailed correspondence from them, and erred in the belief this is how I would have been contacted if there was a problem.   

 

Any suggestions on how to work with the Ombudsman? The loan servicer even suggested I contact them, but prefaced it by saying "in the six years I've been here, I've never seen the Ombudsman overturn a reporting decision by us".    

 

It's been quite the humiliating and humbling experience....


I know nothing about SLs, but you mention loan services.  Who actually owns the loan?

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Thanks for all the good feedback.

 

It's a Fed loan serviced by ~nelnet~. In all fairness, they have been pleasant to speak with on the phone. I drilled down to the executive support team, who in turn continued to recite FCRA compliancy and if I couldn't isolate a mistake made by the company the derragatories would have to remain.  Just like our government, they are so large and mechanized I'm not sure anyone has the ability to make a personal decision to cut someone a break. They have probably been subjected to so much compliancy litigation over the years it's made them callus and unwilling to empathize with anyone.  

 

Hegemony: I will heed your advice with the ombudsman and continue with GW letters.

 

Centex: I appreciate your time with the thought-provoking response. The loan servicer has done nothing wrong or inappropriate, so I don't know what the basis of a complaint would be? If a furnisher is not required to use all available means of communication with the borrower than end of story. I think it's a compelling argument for a moral obligation, but probably nothing else. Unless I'm missing something??  

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58 minutes ago, JTorrap said:

Thanks for all the good feedback.

 

It's a Fed loan serviced by ~nelnet~. In all fairness, they have been pleasant to speak with on the phone. I drilled down to the executive support team, who in turn continued to recite FCRA compliancy and if I couldn't isolate a mistake made by the company the derragatories would have to remain.  Just like our government, they are so large and mechanized I'm not sure anyone has the ability to make a personal decision to cut someone a break. They have probably been subjected to so much compliancy litigation over the years it's made them callus and unwilling to empathize with anyone.  

...

...

 

Again, I have zero experience with student loans, but there are people who have ultimately prevailed simply by making it too much hassle for the data furnisher not to comply.  

 

I'd write various government agencies.  The actual owner of the debt.  Elected representatives.  

 

What if you simply invented a reason to sue them?  Would they spend a few thousand dollars to respond or simply give up and delete the derogatory data?  

 

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