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TRANSFER DEFAULTED LOANS
Agencies may require a contractor to perform some or all
of the tasks associated with transferring defaulted loans for
the loans being serviced by the contractor. Agencies may issue
task orders that include requirements for this service which
contains services similar to the those described below. A task
order may require any combination of these services. These services
illustrate some of the types of tasks that the contractor may
be required to perform under this contract, but this is not
intended to be an all inclusive list. Rather, it illustrates
the types of services a contractor may provide.
An agency shall provide the specific circumstances
which place a loan in default status. This normally includes
such factors as:
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the borrower’s (and
endorser, if applicable) failure to make an installment
payment when due or meet other terms of the promissory
note
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the documented appearance of actions
which lead to a reasonable conclusion that the borrower
no longer intends to honor the obligation to repay
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the documented appearance of actions
which lead to a reasonable conclusion that the borrower
no longer intends to honor the obligation to repay
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the failure to repay persists for
time period specified by the ordering agency
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When required, agencies may issue task orders
that include the transferring of defaulted loans which may require,
but are not limited to the following types of tasks:
- The contractor may be required to transfer defaulted loan
data to an agency’s central database for the purpose of
transferring the loan to an agency's Debt Collection Service
(DCS).
- After the contractor has sent a final demand letter or
other such notice to the borrower and received no response
from the borrower for a specified time period, the contractor
may be required to submit a transaction to the agency’s
central database notifying it that the loan is in default.
Collection responsibility for the loan may then be transferred
to DCS for enforced collection.
- Since the transfer of the defaulted loan changes the party
to whom the borrower must send subsequent payments, the
contractor may be required to, within a specified time period
from the date a loan is transferred, provide a notice to
the borrower with information required by the ordering agency
such as:
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the transfer action
and effective date |
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the name and address of the
new collection point to which subsequent payments
and correspondence must be sent |
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the telephone numbers of points
of contact at both the contractor and DCS. |
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