Sadly, there are mortgage and student loan service providers in America that take advantage of people who are under financial stress.
Recently, the U.S. Consumer Financial Protection Bureau released a report saying that the agency is actively monitoring companies that service student loans and mortgages, tricking customers into paying higher fees illegally.
The CFPB reportedly found that “some student loan servicers inflated minimum payments due, made illegal debt collection calls or charged unlawful late fees, even after borrowers had made payments during [grace periods],” according to Reuters.
Remember, these companies are hired by financial institutions to collect and process payments. The report did not indicate which providers committed the acts.
In addition to the student loan issues, the agency said that it found other similarities with mortgage service providers, finding that some delayed loan modifications and misrepresented borrowers about terms.
“These misrepresentations about the available terms affected the borrowers’ payments, whether they would accept the modification, and how they could budget based on their expected payment,” the agency said, according to Reuters.
Should I Talk to a Bankruptcy Attorney About Student Loans and/or Foreclosure?
As we have reported over the last couple of weeks in our blog, although student loans are difficult to discharge through bankruptcy, borrowers do have options. Through a Chapter 7 or Chapter 13 bankruptcy, borrowers can eliminate other forms of debt like credit card payments and medical bills, which may make paying student loans easier.
Additionally, if you are facing the threat of foreclosure, through a Chapter 13 filing, you can enter into a repayment plan lasting three to five years. A filing will give you time to pay off the debt, as an automatic stay goes into effect that prevents a lender from taking actions against you. This can help you save your home and may be a better alternative than loan modification.
If you are drowning in debt, contact our bankruptcy lawyer today for a consultation. We understand how stressful the threat of wage garnishment, collections and foreclosure can be.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: The CFPB oversees mortgage companies, loan servicers, payday companies and student loan lenders.