Since last week’s announcement that the Department of Education was forgiving $150 million in federal student loans, many people have reached out to us to see if they may benefit.
Those who will receive forgiveness under the $150 million announcement are limited to only those borrowers who:
Today, a CNBC reporter Annie Nova, reports and gives an update on our Public Service Loan Forgiveness cases in Florida against Great Lakes and Navient for misrepresentations about the program. Both of these cases are seeking or will seek class action status.
https://www.cnbc.com/2018/12/18/borrowers-denied-public-service-loan-forgiveness-file-lawsuits.html
If you have a FHA mortgage and have not had a face-to-face meeting with your lender, this may be the ticket to stop the foreclosure!
Foreclosures are on the rise in Florida: Tampa/St. Pete is up 75%; Orlando is up 198% and Jacksonville is up an astonishing 332%. While Tampa is the strongest real estate market of these other Florida metro areas, this uptick bears watching. Overall, I’d have to say as a foreclosure defense attorney that lenders appear to have corrected many of their ways regarding properly documenting a mortgage and its subsequent assignment. But lender practices are often still deficient. A foreclosure defense attorney just needs to be more diligent in representation to ensure our laws are followed.
A mechanism that was designed to prevent unnecessary foreclosures is found in FHA mortgages and is known as the face-to-face meeting requirement. FHA notes specifically limit acceleration of the debt and foreclosure only when permitted by HUD regulations.
The Fair Debt Collection Practices Act (“FDCPA”) and its Florida counterpart, the Florida Consumer Collection Practices Act, (“FCCPA”) require a debt collector or creditor to cease all collection efforts once a consumer acts to preserve their rights. But you have to ask first, and in writing by sending a cease and desist.
Under 15 U.S.C. Section 1692c(c) if a consumer notifies the debt collector, in writing, to cease further communications OR if the consumer notifies the debt collector, in writing, that he or she refuses to pay the debt, the debt collector cannot communicate with the debtor, with 2 exceptions.
In several stunning revelations, Betsy DeVos announced on November 27, 2018 in a press release that the federal government has 1.5 trillion dollars of federal student loan debt (more than credit card debt and auto loans combined). It took 42 years from 1965-2007 for the federal student loan balance to grow to 500 billion dollars and in the last ten years that 500 billion has tripled. However, that wasn’t the surprising part.
Only 24% of federal student loan borrowers are currently paying down both principal and interest. Nearly 20% of all loans are delinquent or in default. Those are very high numbers.
To compare, that’s seven times the rate of delinquency on credit card debt.
Absolutely yes. But admittedly, the bar is pretty low for the creditor pre-litigation to satisfy their obligation.
The Fair Debt Collection Practices Act (“FDCPA”) provides that a debt collector’s initial written communication to the consumer MUST effectively convey the following information:
While there are often legal disputes about what kind of phone system a caller is using, if you are receiving pre-recorded calls, they are usually always a violation of the Telephone Consumer Protection Act (“TCPA”). As 2018 nears an end, there is no sign that these cases are slowing down. The National Law Review published their case review on December 6, 2018 as to the recent case law developments. Lots of new court opinions on what constitutes an ATDS – automatic telephone dialing system – of course.
For more information, please view our short video prepared by Arkovich Law for tips about how you can stop these calls or obtain damages for $500 – $1,500 per call for those calls after you ask them to stop calling your cell phone.
A recent GAO report showed just how poor of a job that the Department of Education and its various servicers are doing in communicating and explaining options to reduce student loan debt. This is the primary reason why so many people are being declined Public Service Loan Forgiveness. So I’d like to recognize and thank employers and schools that are picking up the torch and helping to get student loan relief for their employees.
This week, Blue Pearl Veterinary Partners, allowed me the opportunity to join Ken Russell of Principal Life to help explain student loan options to their interns at their veterinary hospitals. Turns out veterinaries have doctor sized student loans but not doctor sized pay. My aunt is employed by Mercy/Methodist hospital up north which is now giving out resources to its employees to help them understand and apply for income driven plans. I commend employers who recognize that we are in a student loan crisis and have taken the time to help get needed information to their employees. This year, we also put on a seminar for upcoming graduates of University of Tampa on what to expect and how to minimize their student debt. Both employers and schools see the problem.
Relying only on the Department of Education and their array of servicers is turning out to be a miscalculation that is costing former students their future. The servicers pay their customer service employees more money to cut calls short – short call durations = bonuses. If sued, the servicers claim that they do not represent the borrowers, they represent the student loan creditors. And finally, both the servicers and the Department of Education argue that the federal Higher Education Act preempts any state consumer protection laws. We do not believe that is true and the issue is up on appeal right now in the Eleventh Circuit.
I’m still seeing a ton of misinformation out there. A perfect example of this is someone who consulted with us yesterday and granted us permission to tell her story to hep others.
First, this client, we’ll call her Debbie, is a retired teacher who had $73,000 in Parent Plus loans. She was told two different (what I can only say were lies at this point). First, her servicer told her that if she didn’t pay her Parent Plus loans, her son would be responsible for them. Not true.
Second, even though she was a teacher, she was told that she would not qualify for Public Service Loan Forgiveness. While this may have been technically true under her former loan types, the servicer conveniently omitted the fact she could consolidate and apply for ICR in order to qualify for PSLF. Omissions are usually seen as another form of a lie. The borrower is left with the false impression that nothing can be done and they are stuck. Keep in mind that the Public Service Loan Forgiveness Program was created specifically to encourage people to obtain degrees, often expensive Masters’ degrees, and go into the lower paid education field.
It’s difficult for laypeople (and sometimes bankruptcy attorneys) to believe there are legal options to reduce student loan debt after hearing for years that “student loans are nondischargeable in bankruptcy”. Well, this is not always true. They can be discharged – or partially discharged – and brand new payment terms set up.
Take a look at a review posted yesterday of one such case by Aaron:
Reboot Your Life: Tampa Student Loan and Bankruptcy Attorney Blog