My sister (44) took a loan from Wells Fargo some years ago to go back to school for her MBA. She has had some financial difficulties since then (lay off, divorce etc.), and had an arrangement of interest only payments of about $150/month. She’s saying that Wells Fargo has sold her loan to some company that she cannot contact, and suddenly they are demanding the full payment of $450/month on the $42k loan balance, which she can’t afford.
Is a student loan through Wells Fargo for example considered a private and not Federal loan, therefore, not offering alternatives such as the income based payment plan? Also, if it is private, is it legal for them to suddenly demand this large jump in payments with no recourse for her and no response to her inquiries? Any information is helpful. Many thanks.
The underlying issue here is the agreement that Wells Fargo had with your sister. Was she making payments on time under that agreement and is their any proof of the agreement.
If the argument is that Wells Fargo sold the loan and thus payments could not be made, that’s not going to be a winning position.
The fact the loan was sold makes me believe she might have been in default at the time the loan was sold and if that’s the case then any previous payment agreement would have terminated.
Who is this new loan servicing company? Do we know yet?
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