May 5, 2025 • 16 mins
Mortgage interest rates experienced volatility last week due to rumors about Japan selling treasury securities but have since stabilized back into the high 6's with expectations to settle in the mid-six range throughout the week.
Student loan collections have officially begun for approximately 10 million Americans with delinquent loans
• 5.3 million borrowers are in default (more than 270 days late) while 4 million are 91-180 days late
• Collection actions can include garnishing tax returns, social security income, and up to 15% of wages
• First step for those in default is obtaining a current credit report from the major bureaus
• Establishing payment plans can begin improving credit scores after 6-12 months of on-time payments
• Loan disputes are possible if reporting is inaccurate, especially when loans have been sold
• Any federal debt delinquency makes borrowers ineligible for mortgages until resolved
If you or someone you know is dealing with student loan defaults, reach out to us for guidance on how this affects your homebuying potential or to connect with resources for addressing loan issues.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
All right, welcome to the Monday Market Update.
Call Happy Cinco de Mayo toanyone and everyone out there
that's either listening to therecording or watching live or on
YouTube.
Speaker 2 (00:14):
if you celebrate so without any hesitation, Nikki,
I'll let you jump in Well, goodmorning everyone and, yes, like
Angie said, happy Cinco de Mayo.
So we had some interestingthings happen with mortgage
interest rates last week, whichkind of picked up the volatility
on the interest rates.
Luckily that has settled backdown into today.
(00:35):
So what had happened is latelast week Japan had talked about
selling off somemortgage-backed securities or
selling off some treasuries.
I'm sorry, and when thathappens, if they were to sell
off those treasuries that wouldput some volatility into the
market.
It was more of like this rumorthat had started but it created
this kind of wave of increase ofinterest rates from a mortgage
(00:56):
standpoint.
So we kind of hit up into thesevens late last week.
But Japan did go on record insaying that they are not
planning on selling any of theirtreasuries, which has helped
the market correct as of today.
So we are still in those highsixes but we are expecting it to
settle back down to that midsix range throughout the week.
So not a lot of economicactivity happening that's going
(01:17):
to influence mortgage interestrates.
Of course I knock on woodbecause we never know right now
with everything that's beenhappening and all the volatility
that we're seeing, the bigthing that is in the news today,
and the thing that's startingtoday is that student loan debt
that was previously put on hold,people that have defaulted, or
defaulted student loans,basically, that are either in
default or are behind onpayments.
(01:38):
So, of the 10 million, about5.3 million are considered in
default, which means that theyare greater than 270 days late
(02:01):
on payments.
And then you have about 4million a little over 4 million
people who are 91 to 180 dayslate, and so basically, what
that means is that the studentloan companies are now starting
the collection process for thosepeople who are in default on
their student loans.
So they had until February 1stof this year to do something to
(02:23):
say hey, you know what?
I know that I haven't paidsince 2020.
Let me work out a payment plan,Let me figure this out.
And the late payments on thosestudent loans started reporting
in March, February and March.
So there was this big issue withanyone who was looking to
qualify for a home if they hadstudent loan default and they
hadn't taken care of thesituation before February 1st.
(02:45):
A lot of them were showing nowlate payments on their student
loans, late payments on theircredit report, which dropped
their credit scores andprevented quite a few people
from actually being able topurchase homes that were
affected by these changes, sothey were told that this was
going to happen.
Who knows what the warningsystem was like, but it is
starting to create an issue now.
(03:06):
So of and the unfortunate thingis is of the almost 9.4 million
of these student loans that arein default, or 9.4 million
people that have student loansthat are in default, 65% of them
are considered what'sconsidered the lower income
earner, and they define a lowerincome earner by someone who is
(03:27):
earning less than 200% of thepoverty line.
So anyone that's, you know,let's just say, the poverty
line's at $35,000, anyoneearning less than $70,000 is
what they consider to be a lowerincome earner.
So, 65% of the people who havethose student loans in default
are lower income earners.
So it's starting to become anissue and we're trying to figure
(03:47):
out the government's trying tofigure out what to do about this
.
Right now there is a collectionprocess that goes on.
It can include garnishing taxreturns, it can include
garnishing social securityincome and it also can include
actually garnishing their earnedincome up to 15% through their
employers, actually garnishingtheir earned income up to 15%
through their employers.
(04:07):
So if you think about somebodywho's earning less than 200% of
the poverty line, 15% of thatincome is a huge amount for them
to be able to adjust for inorder to get these student loans
back in line.
And so we want to keep an eyeon it because it's going to
start to have a trickle downeffect into the housing industry
and a lot of people don't thinkabout it.
But it talks about credit scores, late payment, showing on
(04:28):
credit, how we account forstudent loans in the loan
process, because for us, if youare not making payments on your
student loans and they're stillreflecting as on-time or
up-to-date, we have to usecertain percentage of the
balance in order to qualify youfor a house.
And so it'll be.
You know, once this kind ofthis wave comes through and
(04:50):
these student loans are startingto go into collection, it's
really going to affect how wecan qualify people for
purchasing homes.
So it'll be an interestingthing to watch and kind of
interesting to see how thateffect trickles downhill.
From a mortgage standpoint andfrom a real estate standpoint.
A lot of first-time homeyersare going to be affected by this
.
So if you are someone who doeshave student loans and they are
in default or you didn't makethe February 1st cutoff time to
(05:12):
be able to reset those studentloans, it'd behoove you to try
to contact the student loancompany and set up a payment
plan so that that doesn't gointo the collections and so that
you can prevent the damage fromyour credit being a long-term
damage.
Speaker 1 (05:27):
Wow, yeah, no, that's .
I've started just hearing aboutit now more Again.
I don't watch the mainstreammedia or news quite often, but
yet it is just coming out on allof the different channels.
And I guess, Nikki, I'd beinterested to see and understand
a little bit more about, likefrom a buyer's agent standpoint,
(05:50):
or when we're talking to newbuyers, if they're younger in
their thirties, you know whatare the right questions to ask
or how to ask them.
I know when we went throughCOVID and people were on
deferment, you know, in somecases of their mortgages.
Now, on listing appointments,we had to start and continue to
have to ask did you defer yourmortgage during that time?
(06:13):
And so I guess, on the flipside of now this coming into
effect with buyers, whatinformation or key information
do you need as a lender, orshould we be asking or looking
out for, as we're pre-qualifyingor having our first initial
conversation with buyers?
Speaker 2 (06:32):
Yeah, I don't think it's unreasonable for you to
talk through, you know, whetherthey have student loans or not.
You know that's a veryimportant question when it comes
to lending in general, but it'salso it could be a question
that you know could bring valueon your end as well and saying,
hey, you know, do you guys havestudent loans and are you sure
that those things that you know,where are you at with making
sure that they're up to date andthat you've worked out a
(06:54):
payment plan and things likethat?
Because that could be an issueright off the bat for them to
get pre-approved.
Obviously, the best thing is totalk to a lender and to get
that soft credit pull done sothat we can see the activity
that is actually going on withtheir student loans.
The other option for them wouldbe to download a Credit Karma
or to download, you know, gointo a credit card app and look
at the FICO score, look at, youknow, things like that.
(07:16):
Credit Karma is going to giveyou like information on what is
actually reporting to yourcredit, or an Experian app or an
Equifax.
Any of those apps are going togive you the information of what
is actually reporting and howit's reporting and from there
you can do some activitiestalking about, maybe disputing
some of the information that'son there, you know, maybe
talking to the creditors andsaying, hey, you know, can we
(07:38):
work something out here.
I've seen it in the past and Idon't know what the future is
going to hold or what the planis from, like a student loan
company as far as collecting onthese things.
But I've seen in the past likeif you set up a payment plan, a
lot of times they will correctyour credit report to show on
time payments, because nowyou've set up a payment plan,
who knows, we don't.
There hasn't been any realprecedence set right now for
(07:59):
this sector of the 10 millionpeople who have these student
loans, but I have a feeling thatsomething's going to need to be
done and it's going to be needto be more than just hey, you're
in collections and you'rescrewed.
So it's one of those thingswhere the details are going to
start to come out.
We've known about this for awhile.
I've done a couple of TikTokson it, about talking about this
specific thing back in Januaryand talking about coming to in
(08:22):
February, talking about thecredit score decreases and the
people that are affected, havealready been affected by this.
So if you do, my biggest thingis, if you do have student loans
, you got to do something withthem.
I mean, whether in theadministration is basically
saying you took out a loan, yougot to pay it back and we got to
figure this out.
So we'll see what happens on along-term basis and how you know
(08:43):
if there is some.
Speaker 1 (08:45):
You know, forgiveness if there is some sort of
payment plan that can be workedout, but from if there is some
sort of payment plan that can beworked out, but from a lending
side, we just it's justsomething that we have to keep
an eye on for sure.
Yep, it's like they.
It had to, the trigger had tobe pulled, you know.
So that now it's out there andit's done so.
So what now?
What?
And looking at how we moveforward, so let's say, I come
(09:06):
across a buyer and they are indefault.
They've been ignoring it, theydidn't see your TikTok, they're
just kind of hiding under theblanket.
What is their first step tocorrect this issue?
Speaker 2 (09:16):
Their very first step is to get a hold of their
credit report and to figure outwhat's on it.
You can also go to Experiancom,equifax or TransUnion and
request a free credit report.
All three of them will give youa free credit report once a
year that you do not have to payfor.
That'll show you exactly what'son there.
From there, anytime you get acredit report, they have phone
(09:38):
numbers and contact informationfor every single creditor that
is on your credit report andthose phone numbers are required
to be accurate and required toactually be the place that you
need to call to get the helpthat you need.
So if you have a student loan,it should have the service, or
let's just call it Nelnet, andthen it'll have their address
and it'll have their phonenumber right below there on that
(09:59):
credit report so that you canget a hold of them and say, hey,
here's what I'm seeing, that'sgoing on.
What are my options?
How can I work out a paymentplan to get this out of default
and start getting on-timepayments to my credit report
again?
You know and really it'shonestly, it is just facing the
music.
I have some clients actuallythat I'm working with right now
(10:20):
that they had student loans thatwere actually went into default
, were sold off to anotherstudent loan company student
loan servicer.
They are working with thecurrent student loan servicer.
They are working with thecurrent student loan servicer to
make on-time payments, but theother the original student loans
are still reporting to theircredit and still reporting all
late payments currently, eventhough those loans were sold off
(10:42):
.
They have all the information.
They got the emails, they gotthe documents saying hey, we're
selling these loans to thisservicer.
The new servicer is actuallyreporting accurately.
They went to go back to the oldservicer and said, hey, this is
wrong and they couldn't get anyhelp.
So they went directly to thecredit bureau agency, uploaded
all their documents and said,hey, this is reporting
incorrectly, we're disputingthis and they're able to get
(11:04):
those things removed off theircredit because they were
reporting inaccurately.
So we're talking someone whohas a 560 credit score that's
probably gonna end up somewherearound 700 because of the
mistakes that were made on thestudent loan side.
So there is.
You do have options to correctit.
You do have options to startshowing those on-time payments
and most of the time, if you'rein default and you can work out
(11:26):
a payment plan.
Most of the time that creditscore is gonna go up after
you're making six to sevenpayments on time, and then after
the 12 month mark or the 12 ontime payment marks, a lot of
times that credit score can beincreased even more.
Speaker 1 (11:41):
That was my next question, perfect.
How long does it take?
And I love that you mentionedpulling the credit, because they
have to keep it up to date.
So if it has been sold and youdon't know where it's had, or
you're just not certain, haven'tgot the mail or whatnot, it's
there, it's there for you andit's it is like you said, just
face the music and start now.
(12:02):
Now's, now's the time, for sure.
Speaker 2 (12:05):
Yeah, and just as a side note, um, so anytime anyone
is in default on governmentdebt or federal debt no matter
if it's student loans or anyother kind of federal debt they
will not be able to get amortgage until they take care of
it.
So that's very important toknow.
If you are in default ordelinquent on any federal debt
(12:25):
at all, you cannot get amortgage until it's made current
.
So that's just something thatis a question on every single
loan application that we take isif you are default or
delinquent in any federal debt,student loans are considered
federal debt.
Speaker 1 (12:38):
Perfect, good to know , yeah, wonderful.
Well, yeah, I think that's ahot topic, absolutely.
So I'm glad that you coveredthat today because I think and I
think there's a lot of peopleout there that know someone,
maybe in their family or theirchildren, that this has happened
to.
So I think, yeah, it'sdefinitely something to
(13:00):
highlight and I will beinterested in meeting with you
again and doing this every week.
What now, like, do you have any?
I know you don't have a crystalball, but if you were to
speculate I know you don't havea crystal ball, but if you were
to speculate, have you heard anyspeculations of what the
administration or what willhappen to help correct these?
You said 10 million defaultsare behind loans.
Speaker 2 (13:29):
Right now, the administration is just saying
you got to pay, and however thatis, if we can't get ahold of
you.
If we can't, you know, if youdon't take action, we're going
to start garnishing wagesbecause we need to be paid back.
It's you know.
Unfortunately, there were somelending practices in the student
loan world that weren't exactlyideal for students, and whether
they knew what they weregetting themselves into or
(13:49):
didn't you know, kind of, whenwe talk about that whole
mortgage, you know, crash in2008,.
Like, did the people who gotmortgages know exactly what they
were getting themselves into?
That's still up for debate.
The point being that now thatthe debt is there, you got to do
something with it, and it'sit's.
You got to start paying it backin one way, shape or form.
And I don't know if they havedifferent.
Like I said, I haven't heard ifthey have different payment
(14:10):
plans.
I don't know if they haveincome-based payment.
Well, I know that student loansdo have income-based payment
plans, but it's unclear onwhether the ones that are in
default or delinquent areallowed to go on an income-based
payment plan.
So that like and is it going tobe 2% of the balance?
Is it going to be 1% of thebalance.
Is it going to be income?
We don't know.
So it's just one of thosethings where you know time will
(14:40):
tell and, like you said, updateover time and kind of just see
what the trends are and what theofferings are.
Speaker 1 (14:45):
Well and, as the year progresses, if you have any
questions on it or if you comeacross a buyer, reach out to
Nikki and she'll be able to dothat Soft pull, take a look, or,
if they've already pulled it,it's so, so important to partner
with someone.
If you don't have a financialadvisor or someone that can
really help you, or even if youdo, nikki is definitely the
(15:08):
resource that you'll want toreach out to or have your buyers
reach out to, or she'll do acall with both of you on it.
So, so, very helpful, and Ijust appreciate you, nikki, how
you show up here every week andin taking care of my buyers and
many, many agents out there.
Speaker 2 (15:23):
So I appreciate you.
Yes, I appreciate being on hereand, like I said, if you do
have any questions about this oranything else, I'm always
available, so or?
Speaker 1 (15:31):
anything else, I'm always available.
Well, again, thank you for yourtime Everyone.
Have a fantastic week.
Reach out to Nikira if you needanything at all, and happy
Cinco de Mayo All right guys,Bye.
All right, welcome to the Monday Market Update.
Call Happy Cinco de Mayo toanyone and everyone out there
that's either listening to therecording or watching live or on
YouTube.
Speaker 2 (00:14):
if you celebrate so without any hesitation, Nikki,
I'll let you jump in Well, goodmorning everyone and, yes, like
Angie said, happy Cinco de Mayo.
So we had some interestingthings happen with mortgage
interest rates last week, whichkind of picked up the volatility
on the interest rates.
Luckily that has settled backdown into today.
(00:35):
So what had happened is latelast week Japan had talked about
selling off somemortgage-backed securities or
selling off some treasuries.
I'm sorry, and when thathappens, if they were to sell
off those treasuries that wouldput some volatility into the
market.
It was more of like this rumorthat had started but it created
this kind of wave of increase ofinterest rates from a mortgage
(00:56):
standpoint.
So we kind of hit up into thesevens late last week.
But Japan did go on record insaying that they are not
planning on selling any of theirtreasuries, which has helped
the market correct as of today.
So we are still in those highsixes but we are expecting it to
settle back down to that midsix range throughout the week.
So not a lot of economicactivity happening that's going
(01:17):
to influence mortgage interestrates.
Of course I knock on woodbecause we never know right now
with everything that's beenhappening and all the volatility
that we're seeing, the bigthing that is in the news today,
and the thing that's startingtoday is that student loan debt
that was previously put on hold,people that have defaulted, or
defaulted student loans,basically, that are either in
default or are behind onpayments.
(01:38):
So, of the 10 million, about5.3 million are considered in
default, which means that theyare greater than 270 days late
(02:01):
on payments.
And then you have about 4million a little over 4 million
people who are 91 to 180 dayslate, and so basically, what
that means is that the studentloan companies are now starting
the collection process for thosepeople who are in default on
their student loans.
So they had until February 1stof this year to do something to
(02:23):
say hey, you know what?
I know that I haven't paidsince 2020.
Let me work out a payment plan,Let me figure this out.
And the late payments on thosestudent loans started reporting
in March, February and March.
So there was this big issue withanyone who was looking to
qualify for a home if they hadstudent loan default and they
hadn't taken care of thesituation before February 1st.
(02:45):
A lot of them were showing nowlate payments on their student
loans, late payments on theircredit report, which dropped
their credit scores andprevented quite a few people
from actually being able topurchase homes that were
affected by these changes, sothey were told that this was
going to happen.
Who knows what the warningsystem was like, but it is
starting to create an issue now.
(03:06):
So of and the unfortunate thingis is of the almost 9.4 million
of these student loans that arein default, or 9.4 million
people that have student loansthat are in default, 65% of them
are considered what'sconsidered the lower income
earner, and they define a lowerincome earner by someone who is
(03:27):
earning less than 200% of thepoverty line.
So anyone that's, you know,let's just say, the poverty
line's at $35,000, anyoneearning less than $70,000 is
what they consider to be a lowerincome earner.
So, 65% of the people who havethose student loans in default
are lower income earners.
So it's starting to become anissue and we're trying to figure
(03:47):
out the government's trying tofigure out what to do about this
.
Right now there is a collectionprocess that goes on.
It can include garnishing taxreturns, it can include
garnishing social securityincome and it also can include
actually garnishing their earnedincome up to 15% through their
employers, actually garnishingtheir earned income up to 15%
through their employers.
(04:07):
So if you think about somebodywho's earning less than 200% of
the poverty line, 15% of thatincome is a huge amount for them
to be able to adjust for inorder to get these student loans
back in line.
And so we want to keep an eyeon it because it's going to
start to have a trickle downeffect into the housing industry
and a lot of people don't thinkabout it.
But it talks about credit scores, late payment, showing on
(04:28):
credit, how we account forstudent loans in the loan
process, because for us, if youare not making payments on your
student loans and they're stillreflecting as on-time or
up-to-date, we have to usecertain percentage of the
balance in order to qualify youfor a house.
And so it'll be.
You know, once this kind ofthis wave comes through and
(04:50):
these student loans are startingto go into collection, it's
really going to affect how wecan qualify people for
purchasing homes.
So it'll be an interestingthing to watch and kind of
interesting to see how thateffect trickles downhill.
From a mortgage standpoint andfrom a real estate standpoint.
A lot of first-time homeyersare going to be affected by this
.
So if you are someone who doeshave student loans and they are
in default or you didn't makethe February 1st cutoff time to
(05:12):
be able to reset those studentloans, it'd behoove you to try
to contact the student loancompany and set up a payment
plan so that that doesn't gointo the collections and so that
you can prevent the damage fromyour credit being a long-term
damage.
Speaker 1 (05:27):
Wow, yeah, no, that's .
I've started just hearing aboutit now more Again.
I don't watch the mainstreammedia or news quite often, but
yet it is just coming out on allof the different channels.
And I guess, Nikki, I'd beinterested to see and understand
a little bit more about, likefrom a buyer's agent standpoint,
(05:50):
or when we're talking to newbuyers, if they're younger in
their thirties, you know whatare the right questions to ask
or how to ask them.
I know when we went throughCOVID and people were on
deferment, you know, in somecases of their mortgages.
Now, on listing appointments,we had to start and continue to
have to ask did you defer yourmortgage during that time?
(06:13):
And so I guess, on the flipside of now this coming into
effect with buyers, whatinformation or key information
do you need as a lender, orshould we be asking or looking
out for, as we're pre-qualifyingor having our first initial
conversation with buyers?
Speaker 2 (06:32):
Yeah, I don't think it's unreasonable for you to
talk through, you know, whetherthey have student loans or not.
You know that's a veryimportant question when it comes
to lending in general, but it'salso it could be a question
that you know could bring valueon your end as well and saying,
hey, you know, do you guys havestudent loans and are you sure
that those things that you know,where are you at with making
sure that they're up to date andthat you've worked out a
(06:54):
payment plan and things likethat?
Because that could be an issueright off the bat for them to
get pre-approved.
Obviously, the best thing is totalk to a lender and to get
that soft credit pull done sothat we can see the activity
that is actually going on withtheir student loans.
The other option for them wouldbe to download a Credit Karma
or to download, you know, gointo a credit card app and look
at the FICO score, look at, youknow, things like that.
(07:16):
Credit Karma is going to giveyou like information on what is
actually reporting to yourcredit, or an Experian app or an
Equifax.
Any of those apps are going togive you the information of what
is actually reporting and howit's reporting and from there
you can do some activitiestalking about, maybe disputing
some of the information that'son there, you know, maybe
talking to the creditors andsaying, hey, you know, can we
(07:38):
work something out here.
I've seen it in the past and Idon't know what the future is
going to hold or what the planis from, like a student loan
company as far as collecting onthese things.
But I've seen in the past likeif you set up a payment plan, a
lot of times they will correctyour credit report to show on
time payments, because nowyou've set up a payment plan,
who knows, we don't.
There hasn't been any realprecedence set right now for
(07:59):
this sector of the 10 millionpeople who have these student
loans, but I have a feeling thatsomething's going to need to be
done and it's going to be needto be more than just hey, you're
in collections and you'rescrewed.
So it's one of those thingswhere the details are going to
start to come out.
We've known about this for awhile.
I've done a couple of TikTokson it, about talking about this
specific thing back in Januaryand talking about coming to in
(08:22):
February, talking about thecredit score decreases and the
people that are affected, havealready been affected by this.
So if you do, my biggest thingis, if you do have student loans
, you got to do something withthem.
I mean, whether in theadministration is basically
saying you took out a loan, yougot to pay it back and we got to
figure this out.
So we'll see what happens on along-term basis and how you know
(08:43):
if there is some.
Speaker 1 (08:45):
You know, forgiveness if there is some sort of
payment plan that can be workedout, but from if there is some
sort of payment plan that can beworked out, but from a lending
side, we just it's justsomething that we have to keep
an eye on for sure.
Yep, it's like they.
It had to, the trigger had tobe pulled, you know.
So that now it's out there andit's done so.
So what now?
What?
And looking at how we moveforward, so let's say, I come
(09:06):
across a buyer and they are indefault.
They've been ignoring it, theydidn't see your TikTok, they're
just kind of hiding under theblanket.
What is their first step tocorrect this issue?
Speaker 2 (09:16):
Their very first step is to get a hold of their
credit report and to figure outwhat's on it.
You can also go to Experiancom,equifax or TransUnion and
request a free credit report.
All three of them will give youa free credit report once a
year that you do not have to payfor.
That'll show you exactly what'son there.
From there, anytime you get acredit report, they have phone
(09:38):
numbers and contact informationfor every single creditor that
is on your credit report andthose phone numbers are required
to be accurate and required toactually be the place that you
need to call to get the helpthat you need.
So if you have a student loan,it should have the service, or
let's just call it Nelnet, andthen it'll have their address
and it'll have their phonenumber right below there on that
(09:59):
credit report so that you canget a hold of them and say, hey,
here's what I'm seeing, that'sgoing on.
What are my options?
How can I work out a paymentplan to get this out of default
and start getting on-timepayments to my credit report
again?
You know and really it'shonestly, it is just facing the
music.
I have some clients actuallythat I'm working with right now
(10:20):
that they had student loans thatwere actually went into default
, were sold off to anotherstudent loan company student
loan servicer.
They are working with thecurrent student loan servicer.
They are working with thecurrent student loan servicer to
make on-time payments, but theother the original student loans
are still reporting to theircredit and still reporting all
late payments currently, eventhough those loans were sold off
(10:42):
.
They have all the information.
They got the emails, they gotthe documents saying hey, we're
selling these loans to thisservicer.
The new servicer is actuallyreporting accurately.
They went to go back to the oldservicer and said, hey, this is
wrong and they couldn't get anyhelp.
So they went directly to thecredit bureau agency, uploaded
all their documents and said,hey, this is reporting
incorrectly, we're disputingthis and they're able to get
(11:04):
those things removed off theircredit because they were
reporting inaccurately.
So we're talking someone whohas a 560 credit score that's
probably gonna end up somewherearound 700 because of the
mistakes that were made on thestudent loan side.
So there is.
You do have options to correctit.
You do have options to startshowing those on-time payments
and most of the time, if you'rein default and you can work out
(11:26):
a payment plan.
Most of the time that creditscore is gonna go up after
you're making six to sevenpayments on time, and then after
the 12 month mark or the 12 ontime payment marks, a lot of
times that credit score can beincreased even more.
Speaker 1 (11:41):
That was my next question, perfect.
How long does it take?
And I love that you mentionedpulling the credit, because they
have to keep it up to date.
So if it has been sold and youdon't know where it's had, or
you're just not certain, haven'tgot the mail or whatnot, it's
there, it's there for you andit's it is like you said, just
face the music and start now.
(12:02):
Now's, now's the time, for sure.
Speaker 2 (12:05):
Yeah, and just as a side note, um, so anytime anyone
is in default on governmentdebt or federal debt no matter
if it's student loans or anyother kind of federal debt they
will not be able to get amortgage until they take care of
it.
So that's very important toknow.
If you are in default ordelinquent on any federal debt
(12:25):
at all, you cannot get amortgage until it's made current
.
So that's just something thatis a question on every single
loan application that we take isif you are default or
delinquent in any federal debt,student loans are considered
federal debt.
Speaker 1 (12:38):
Perfect, good to know , yeah, wonderful.
Well, yeah, I think that's ahot topic, absolutely.
So I'm glad that you coveredthat today because I think and I
think there's a lot of peopleout there that know someone,
maybe in their family or theirchildren, that this has happened
to.
So I think, yeah, it'sdefinitely something to
(13:00):
highlight and I will beinterested in meeting with you
again and doing this every week.
What now, like, do you have any?
I know you don't have a crystalball, but if you were to
speculate I know you don't havea crystal ball, but if you were
to speculate, have you heard anyspeculations of what the
administration or what willhappen to help correct these?
You said 10 million defaultsare behind loans.
Speaker 2 (13:29):
Right now, the administration is just saying
you got to pay, and however thatis, if we can't get ahold of
you.
If we can't, you know, if youdon't take action, we're going
to start garnishing wagesbecause we need to be paid back.
It's you know.
Unfortunately, there were somelending practices in the student
loan world that weren't exactlyideal for students, and whether
they knew what they weregetting themselves into or
(13:49):
didn't you know, kind of, whenwe talk about that whole
mortgage, you know, crash in2008,.
Like, did the people who gotmortgages know exactly what they
were getting themselves into?
That's still up for debate.
The point being that now thatthe debt is there, you got to do
something with it, and it'sit's.
You got to start paying it backin one way, shape or form.
And I don't know if they havedifferent.
Like I said, I haven't heard ifthey have different payment
(14:10):
plans.
I don't know if they haveincome-based payment.
Well, I know that student loansdo have income-based payment
plans, but it's unclear onwhether the ones that are in
default or delinquent areallowed to go on an income-based
payment plan.
So that like and is it going tobe 2% of the balance?
Is it going to be 1% of thebalance.
Is it going to be income?
We don't know.
So it's just one of thosethings where you know time will
(14:40):
tell and, like you said, updateover time and kind of just see
what the trends are and what theofferings are.
Speaker 1 (14:45):
Well and, as the year progresses, if you have any
questions on it or if you comeacross a buyer, reach out to
Nikki and she'll be able to dothat Soft pull, take a look, or,
if they've already pulled it,it's so, so important to partner
with someone.
If you don't have a financialadvisor or someone that can
really help you, or even if youdo, nikki is definitely the
(15:08):
resource that you'll want toreach out to or have your buyers
reach out to, or she'll do acall with both of you on it.
So, so, very helpful, and Ijust appreciate you, nikki, how
you show up here every week andin taking care of my buyers and
many, many agents out there.
Speaker 2 (15:23):
So I appreciate you.
Yes, I appreciate being on hereand, like I said, if you do
have any questions about this oranything else, I'm always
available, so or?
Speaker 1 (15:31):
anything else, I'm always available.
Well, again, thank you for yourtime Everyone.
Have a fantastic week.
Reach out to Nikira if you needanything at all, and happy
Cinco de Mayo All right guys,Bye.
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