Question:
Dear Steve,
I have a student loan that the original creditor who was education finance partners went into bankruptcy and I have been paying my payment to ACS-Specialized servicing company which claims they are servicing the loan for Loan Science LLC.
I have asked them to provide me proof that they are the owner of my loan and that the original note was transferred to them and they said that they would send it to me.
I have waited the 24 to 48 hours in fact it has been a week or so and I have not yet received it.
They want me so sign a loan modification agreement and that is why I requested the documentation on them owning my loan and the original note.
Is that the right thing to do to prove they own my loan and are entitled to the payments.
Craig
Answer:
Dear Craig,
It sounds like you have a valid concern over the ownership of your loan. At this point there are only two possibilities; they own the loan or they don’t. So pursue it.
My concern is what will happen if you sign that loan modification before you get to the bottom of this issue. The loan modification seems as if it would contain language to put them in the best possible position and clear up any past issues.
Considering you are facing some pretty big stakes here it would not be a bad idea to find a consumer attorney who is knowledgeable in debt validation and ask them to represent you.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
If you want to find a local attorney who has some experience in representing consumer issues, take a look at the National Association of Consumer Advocates and find a member attorney.
If you want to try and take a shot at it yourself, read How to Dispute and Ask a Debt Collector to Validate a Debt. Another good article to read is Debt Validation Finally Defined. What You Should Ask a Collector or Creditor for to Validate a Debt.
When the original company went into bankruptcy, the assets were either sold or transferred. Times like that create the greatest chance of documentation getting lost, so asking for proof is a smart thing to do.
I think everyone would agree that asking for someone, claiming to be a creditor you owe, to show you the proof they actually hold the promissory note or loan contract, is a reasonable course of action. All you are asking them to prove to you is that you actually do owe them. If they can’t, well, then what does that say to you?
If a creditor can’t immediately show you proof, that can be easily explained. Not every creditor is well organized and has everything digitally at their fingertips. You’ll probably give them a reasonable amount of time, if they asked for it.
And considering we’ve been through a very loose period on documentation, a large number of loans simply can’t be proven if you push for documentation. But what I see happening is creditors sending some paperwork and claiming that paper proves the loan is valid when it’s not. This is where having a lawyer who is licensed in your state to represent you, is a good idea. That attorney will know the legal requirements for proving the debt is valid and know the creditor may be trying to spoof you.
In my experience, Loan Science has been a type of servicer and not a lender of private loans.. even though they also work with ACS as a servicer, I’m doubtful that Loan Science is the original or current owner of your loan. You may want to ask Loan Science if they can provide a copy of the original Master Promissory Note.
In my recent dealings with Loan Science, the MPN they provided for my client was for a bankrupt private lender and after doing some research, I discovered that the private student loan itself had been bought and sold over 5 times after the original lender filed for CH11 corporate bankruptcy. Loan Science was not involved in any of those sales other than as a servicer.
Craig… Is this a private loan or is it a Federal (Government guaranteed “backed” loan)? If it is a Federal loan(s) you can get some information at at least two of these sources: https://studentaid.ed.gov/sa/ at that site == https://studentaid.ed.gov/sa/repay-loans/disputes/prepare (this is a page about “disputing your loan” and also gives you info on how to contact the “OMBUDSMAN” who may be able to get to the bottom of your situation. ADDITIONALLY….Your loan history may be listed here: https://studentaid.ed.gov/sa/about/announcements/access-aid-info. HOPE THIS HELPS! RICHARD ALLAN PRECHT http://www.unduehardship-povertyrequired.com
I just answered your question.