20 July, 2017
Missing paperwork may cause student borrowers to be forgiven more than $5 billion in debt, according to a Tuesday investigation of court records.
"We don't want National Collegiate to be the poster boy of bad practices in student loan collections, but we have no ability to affect it except through this litigation", he said, referring to a lawsuit that he initiated previous year against the trusts' loan servicer in Delaware's Chancery Court, a popular battleground for corporate legal fights.
The troubled loans that have gone into default total at least $5 billion.
The paperwork documenting the chain of loan ownership disappeared as the bank loans were bundled together and sold to investors through the securitization process.
Are my loans owned by National Collegiate? . If you've gotten collections notices from Transworld or bills from AES, there's a chance National Collegiate holds your student loan.
A group of creditors may not be able to collect on the loans even after taking student borrowers to court because of the missing paperwork, The New York Times reported. "I question whether they actually possess the documents necessary to show that they own loans", Ms. Smith said.More news: Trump admin considering new sanctions on China over North Korea ties
Am I paying my loans on time? .
Has National Collegiate sued me for nonpayment?
Transworld Systems, a debt collector, brings most of the lawsuits for National Collegiate against delinquent borrowers. "It's not like they're rolling over on these cases", Gaudreau says.
Do not ignore the notice. At this time, the court ruled that billions of dollars in subprime mortgages were uncollectible due to missing or faked documentation.
The messy paperwork may be something of a miracle for burdened students, but it is a nightmare for the thousands of borrowers who are now in the middle of the storm, unable to get answers about the state of their loans.