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Old 10-28-2013, 09:32 PM
 
Location: 78245
1,229 posts, read 3,829,668 times
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. Can I Consolidate a Defaulted Loan?

Generally, Federal education loan(s)*in default*may be consolidated in a Direct Consolidation Loan if borrowers:Make*satisfactory repayment arrangements*on the defaulted loans with the current loan holder(s) before consolidating.ORAgree to repay the new Direct Consolidation Loan under either the*Income Contingent or Income-Based Repayment Plan.If, before applying for consolidation, borrowers want to completely clear the default notation from their credit records, they may want to consider another option: loan*rehabilitation. Borrowers should contact their loan holders to obtain more information about this option.



Question, can we get fha loan after consolidating our accounts?
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Old 10-30-2013, 09:24 AM
 
Location: MID ATLANTIC
7,598 posts, read 17,623,584 times
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Quote:
Originally Posted by SA Greed View Post
.


Question, can we get fha loan after consolidating our accounts?
There's not enough information to say......when was it consolidated? And how is it reflected on your credit? The creditor can consolidate the loan, but still report you past due, or report payment as unsatisfactory.

If you haven't consolidated, do it now, then wait 30 days before having your credit pulled.

It's unrealistic to expect to consolidate today and qualify the day after.
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Old 10-30-2013, 09:32 AM
 
Location: Austin
7,077 posts, read 16,893,484 times
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Many lenders will accept CCC if it's been 12 months and you can show proof that you've made the payments on time for 12 months.
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Old 10-30-2013, 10:19 AM
 
Location: MID ATLANTIC
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Quote:
Originally Posted by FalconheadWest View Post
Many lenders will accept CCC if it's been 12 months and you can show proof that you've made the payments on time for 12 months.
Direct Consolidation is for Student loans (under Student Federal Aid) and outside of CCCS. Since Federal Debt never goes away, this is the only way to resurrect a defaulted student loan backed by Uncle Sam.
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Old 10-30-2013, 10:41 AM
 
Location: Austin
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I didn't pay attention to the student loan part, just the consolidation part... my bad.
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Old 10-30-2013, 10:56 AM
 
Location: 78245
1,229 posts, read 3,829,668 times
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Sorry for lack of info, was using mobile phone to post. We have already moved 6 loans into good standing with ACS from ECMC after paying 9 months. We then noticed a USA Funds account which is in default. They gave me Direct Consolidation Loans - Welcome!!! as a place to call for consolidation whom which stated the following. They can consolidate the loans however the original loans will read “Default”. They said I have two options, to pay the 9 month plan again or to consolidate and in 3 months the loans should all be under one IBR income based repayment program. The issue I have as stated is that no one seems to know If we would be disqualified for FHA loan for doing this…? If I have to wait an additional year of payments, might as well set up a repayment plan with USA Funds then consolidation. I thought that since the original loans although reading Default will be at a zero balance which would qualify us for FHA status. Thanks for your replies to my issue.
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Old 10-31-2013, 07:44 AM
 
Location: Southern California
4,350 posts, read 4,933,884 times
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Quote:
Originally Posted by SA Greed View Post
Sorry for lack of info, was using mobile phone to post. We have already moved 6 loans into good standing with ACS from ECMC after paying 9 months. We then noticed a USA Funds account which is in default. They gave me Direct Consolidation Loans - Welcome!!! as a place to call for consolidation whom which stated the following. They can consolidate the loans however the original loans will read “Default”. They said I have two options, to pay the 9 month plan again or to consolidate and in 3 months the loans should all be under one IBR income based repayment program. The issue I have as stated is that no one seems to know If we would be disqualified for FHA loan for doing this…? If I have to wait an additional year of payments, might as well set up a repayment plan with USA Funds then consolidation. I thought that since the original loans although reading Default will be at a zero balance which would qualify us for FHA status. Thanks for your replies to my issue.
I'm not going to address if you will qualify, but how long ago was your last 30 day late payment?

The balance of a default loan of zero means that it won't hurt your income, but it still hurts your credit.

Reading your post, it looks like you have the option of getting your loans out of default status, that is the route I'd take. Is getting this FHA loan so important that you may be hurting your borrowing ability for a long time?

FHA loans typically have a higher monthly cost, so you'd want to get out of the FHA loan as soon as possible since mortgage insurance will be with you for a long time.

This is just a preference of mine although you'll hear stories of people with "bad" credit, foreclosures, etc, buying a home 1 to two years later.

It is possible that you can get wrong information on the internet. What if all the people that post say you won't qualify when in fact you do qualify?
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Old 10-31-2013, 11:07 AM
 
Location: MID ATLANTIC
7,598 posts, read 17,623,584 times
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What will stop you......any loan showing past due or in arrears at the time of closing. Most everyone I know of requires all payments to be brought current. But as the poster above me states, how past due are you? A 1 or 2 x 30 in the past 12 months should squeak by with some good letter writing (and no other late payments), but not much more. Even if you roll in this loan, it will still reflect a past due history.

It's all about how many late payments there have been in the prior 12 months.
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