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Student Loan Sold to Mohela

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puma1552

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Original poster
Nov 20, 2008
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So it looks like my Direct Loan just got sold to some third party called MOHELA.

My payment normally was due on the 28th of the month but now they sold it and it will take two weeks to process the sale, so I have no idea how that works as far as making payments, if my due date will change, etc.

I read thats some people's loan payments tripled (people on income based repayment plans when MOHELA tried to put them on a standard plan) and that some people's rates change, as far as I know all of mine are fixed.

Anyone else have this happen? I don't like it one bit.
 
puma1552 said:
So it looks like my Direct Loan just got sold to some third party called MOHELA.

My payment normally was due on the 28th of the month but now they sold it and it will take two weeks to process the sale, so I have no idea how that works as far as making payments, if my due date will change, etc.

I read thats some people's loan payments tripled (people on income based repayment plans when MOHELA tried to put them on a standard plan) and that some people's rates change, as far as I know all of mine are fixed.

Anyone else have this happen? I don't like it one bit.
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You might want to read http://www.chesnok.com/daily/2012/02/23/mohela-is-shady/
 
WTF? First the Department of Education/Direct Loans bought all federal student loans and consolidated it into themselves.

And now alluva sudden they're selling the loans to shady companies?
 
This is going to be an absolute ****ing nightmare.

Googling around, they are nothing but absolute *********. Changing terms, not informing people of changes, reducing payments by 75% and extending the loan payments for 6 years, etc. etc.

Seems everywhere I find something bad written about them on blogs etc, there's also a mysterious greaseball customer service person there to post a slick reply, which is always a bad sign IME.

I don't want this, at all.
 
puma1552 said:
This is going to be an absolute ****ing nightmare.

Googling around, they are nothing but absolute *********. Changing terms, not informing people of changes, reducing payments by 75% and extending the loan payments for 6 years, etc. etc.

Seems everywhere I find something bad written about them on blogs etc, there's also a mysterious greaseball customer service person there to post a slick reply, which is always a bad sign IME.

I don't want this, at all.
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Changing terms in a contract without consideration makes for the world's easiest lawsuit.

*shrug* but still bizarre. There's all this talk last year or so about the government abandoning private servicers and bringing it all in-house. And now this?
 
dukebound85 said:
why woul dl sell them? i hope mine dont get sold
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It will likely happen soon, this apparently has all begun just a few months ago.

*Apparently* they didn't sell them, but they are being administered by MOHELA. Maybe it's just me, but it looks like the same damn difference when I go onto DL and find that my loans have been paid in full and received an email telling me to deal with MOHELA from here on out for everything.

I'm almost tempted to go to my credit union and take an unsecured loan to pay them off so I won't even have to deal with it.

I have a payment due on the 28th, or at least I did with DL. Now what? Do I wait til who knows when MOHELA gets around to sending me something (google says they aren't too good about doing that) or do I just send a check in the mail to some unknown entity in Missouri and hope they process it when they get it (something else I've been reading they seem to conveniently not do)?

More than anything I'm worried about my credit. It's flawless, and the last thing I want is some sloppy company doing a half-assed job processing a payment (something else they apparently suck at) and it going to collections.
 
I guess I'd advise just to be proactive and reach out to them as soon as possible after they first contact you to make sure you're on the same page.

During college, almost all my federal loans were run by Citi for whatever reason (just the default school/gov't choice). In the last few months of college, they got shipped off to Sallie Mae, Great Lakes, and some other company with a vague name I can't remember off the top of my head (like National Higher Ed blahblah). They reached out to me, I set up all paperless and auto-pays with all of them, and been fine since.

Kind of hope it stays that way, as I enjoy knowing things will hit my account the 10th, 15th, and 20th of the month from each.
 
Whatever you do, document everything. And I mean everything. Every single bit of correspondence, every phone call (by you and by them). Keep copies of everything. If it every does go into dispute, those who have the paper-trail will usually prevail.

When you signed the 1st contract contract, does it allow the lenders to change terms unilaterally? Some do.... you need to check. And some do, but only after due notice. But... get to know your contract better than they do.

Luck!
 
puma1552 said:
This hasn't happened to anyone else yet?
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my loan (Federal Direct consolidation loan from 2007) is being serviced by Nelnet and the terms/repayment haven't been changed at all.

However, I don't think I'm getting the best deal anymore as the market seems to be getting more competitive. I only received one interest rate deduction (1% reduction after 36 months of on-time payments) and no principal reductions. I'd really like to shop the loan around (as it's quite large, roughly 100k and I've paid extra - roughly 2k/month - on-time every month from the first month after the grace period. But, I can't market it around and I'm stuck with a somewhat bad interest rate and no extra bonuses :(
 
acidfast7 said:
and no principal reductions
....
and no extra bonuses :(
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Why should you expect a principal reduction (unless it was written up in the contract.) I mean you signed a contract to borrow a certain amount of money to pay for your education and the expectation is that you that amount back. Just because you pay on time means you are entitled to getting bonuses or principal reductions.

I pay my mortgage on time and I'd love to see the bank reduce the principal amount because I pay on time, but that's never going to happen.
 
maflynn said:
Why should you expect a principal reduction (unless it was written up in the contract.) I mean you signed a contract to borrow a certain amount of money to pay for your education and the expectation is that you that amount back. Just because you pay on time means you are entitled to getting bonuses or principal reductions.

I pay my mortgage on time and I'd love to see the bank reduce the principal amount because I pay on time, but that's never going to happen.
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LOL ... I think you're colouring me as a complainer or someone whom naively accepted student loans ... but nothing could be further from the truth. As background, I have a credit score over 800 and have paid off 3 mortgages while I lived in the US, albeit not in a very wealthy neighborhood.

I don't expect anything extra at all. I knew what I was getting into and I'm fine with the circumstances (and feel that it was a great use of money ... both within my generation and that of my children).

However, I would like them subject to the free-market economy. I can refinance my house for a nominal fee, why can't I do the same with student loans? In essence I could take out a personal loan to pay the student loans off, if I wanted, but it wouldn't be viewed as the same on a credit report (i.e. they wouldn't be guaranteed by the government and/or non-dischargable by bankruptcy.)

FYI, some student loan "servicers" do provide principal and interest reduction schemes, so in this "subfield" of loans (i.e. student loans) it does happen.

http://www.fao.ucla.edu/stafford_loans.htm

For example, Bank of America offers 3% principle reduction after 36 on-time payments. My complaint is that I can't "refinance" a student loan, not that I'm unhappy with my current terms (as they are what I agreed to when I signed them.)
 
iJohnHenry said:
Thanks for the back-grounder.

I thought of you as many things, but never as a slumlord.

:D
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LOL

I renovated a Queen-Anne Victorian by hand while I was doing a PhD. I got a great deal on it originally (in 2003) renovated it and sold it when I left for Europe in 2007.
 

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maflynn said:
Why should you expect a principal reduction (unless it was written up in the contract.) I mean you signed a contract to borrow a certain amount of money to pay for your education and the expectation is that you that amount back. Just because you pay on time means you are entitled to getting bonuses or principal reductions.

I pay my mortgage on time and I'd love to see the bank reduce the principal amount because I pay on time, but that's never going to happen.
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You are wrong in this case. HARP is now avabile for people like you. People who have paid their mortgages on-time instead of defaulting and expecting the banks to modify, now have at least one program to utilize that can be very useful. Do your homework on it.


As for the student loans, they're like any other loan in that you have a Note of sorts. They can't change terms without your signature. Don't sign anything.
 
jessica. said:
You are wrong in this case. HARP is now avabile for people like you. People who have paid their mortgages on-time instead of defaulting and expecting the banks to modify, now have at least one program to utilize that can be very useful. Do your homework on it.
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HARP is the exception but I could be wrong but its in a sense a refi and the original loan has to be a fannie mae/freddie mac loan. My point was that once you signed the contract there should be no expectation that the bank (or the note holder) to reduce the principal just because you paid on time.
 
maflynn said:
HARP is the exception but I could be wrong but its in a sense a refi and the original loan has to be a fannie mae/freddie mac loan. My point was that once you signed the contract there should be no expectation that the bank (or the note holder) to reduce the principal just because you paid on time.
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Oh I see and yes, right now you must be backed by one of them. That was how HAMP was but it changed. I suspect or would hope for that same change under HARP.

And to your actual point, which I missed before, I don't think that anyone signing a contract should feel entitled to a write down (forgiveness) of any part of their balance but the unfortunate truth is that is the way. People who have lived free for year(s) are seeing part of their debt forgiven and interest rates lower than market. It is just the "way." It doesn't mean I am fully supporting the idea.
 
maflynn said:
HARP is the exception but I could be wrong but its in a sense a refi and the original loan has to be a fannie mae/freddie mac loan. My point was that once you signed the contract there should be no expectation that the bank (or the note holder) to reduce the principal just because you paid on time.
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As I stated earlier, I only want the option to subject it to the open market, but I really can't do that with a Federal Direct consolidated student loan. I understand what I signed, but I know a lot of people who didn't.
 
jessica. said:
And to your actual point, which I missed before, I don't think that anyone signing a contract should feel entitled to a write down (forgiveness) of any part of their balance but the unfortunate truth is that is the way. People who have lived free for year(s) are seeing part of their debt forgiven and interest rates lower than market. It is just the "way." It doesn't mean I am fully supporting the idea.
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I see that all too often now a days, people live by the terms of the contract and expect to be rewarded for behavior that they initially agreed too.



acidfast7 said:
As I stated earlier, I only want the option to subject it to the open market, but I really can't do that with a Federal Direct consolidated student loan. I understand what I signed, but I know a lot of people who didn't.
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Agreed, I took your original post as one expecting to have the terms adjusted because of good behavior because as noted that is a common behavior in this "I'm entitled" society.
 
maflynn said:
Agreed, I took your original post as one expecting to have the terms adjusted because of good behavior because as noted that is a common behavior in this "I'm entitled" society.
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I agree with you about the "I'm entitled" mentality. It absolutely disgusts me.
 
maflynn said:
I see that all too often now a days, people live by the terms of the contract and expect to be rewarded for behavior that they initially agreed too.
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I would tend to agree if not for the current state today. You can't honestly tell me that you haven't once wondered why it is that these people who sit on their asses living in their homes for free get relief while you continue to pay your mortgage on time every month come hell or high water. If you haven't thought that then you're a better person than I am. It is not that I feel entitled, I just feel as though this country rewards mistakes. There are some who genuinely should be helped but the number exceeds that beyond comprehension. And still, there are people like you and me who will pay their mortgage every month because we all believe in this weird thing called a contract.

And I mean not to hijack the thread, this could probably be split up and sorry to the OP.
 
jessica. said:
I would tend to agree if not for the current state today. You can't honestly tell me that you haven't once wondered why it is that these people who sit on their asses living in their homes for free get relief while you continue to pay your mortgage on time every month come hell or high water. If you haven't thought that then you're a better person than I am. It is not that I feel entitled, I just feel as though this country rewards mistakes. There are some who genuinely should be helped but the number exceeds that beyond comprehension. And still, there are people like you and me who will pay their mortgage every month because we all believe in this weird thing called a contract.

And I mean not to hijack the thread, this could probably be split up and sorry to the OP.
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I was astonished when I moved to Germany.

In Texas, people were getting 100-110% mortgages on prefab homes in a subdivision.

Here, a down payment usually runs 30-40% of the total cost (fees alone run 10% of total sales cost) and with land prices running 30€/m2 in a village and 125€/m2 in a suburb, one is look at 120k€ in a village or roughly 500k€ for an acre of land in a suburb. So, just for the land, you need €40k in a village or €200k in a suburb. Of course, most get only a fraction of that much space. However, it's not so easy to save when the mandatory deductions run 45-55% of the gross pay.

Maybe that's why property prices are totally flat here and only 42% of people own places and most people I know have been saving for a house/flat since age 8.
 
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