USAA dumb policy

[jeb]

Just talked with USAA ref my auto loan with them -

I owe some $15,000.00 on vehicle worth approx. $10,000.00.

If they repo and send to auction they might get $8,000.00 for it.

I wanted to cut payments and maybe reduce loan amount.

Their policy is that they will not deal with me in any way - keep making payments or they repo.

They WILL, however, allow me to sell the vehicle - at less than the $15,000.00 owed - to someone else.

Are they really that dumb??? - jb

[justbroke]

Are they really that dumb??? - jb

It sounds dumb, but you have to look at it from their side.

They are trying to get rid of toxic debt. Since you already have a toxic loan, they really want nothing to do with that loan, and will repossess and sell the car and write off the deficiency, just to get it off their books!

Sounds counterintuitive... but that's the way it works.

[TEW]

wait a minute where is the loss for the bank? You've been paying now for what about 2 years most of the payment went to interest. now they get the car back and sell it for 8 K maybe. somebody fill me in on where the POOR bank lost money.

[jeb]

Well, yes and no.

If they redo my loan they can take that loss off their books as well and they still have good payments coming on on the remaining loan. - jb

[Ugh07]

wait a minute where is the loss for the bank? You've been paying now for what about 2 years most of the payment went to interest. now they get the car back and sell it for 8 K maybe. somebody fill me in on where the POOR bank lost money.

Read about the "Time Value of Money" and how it applies in this case. The Bank will be taking a loss.

[justbroke]

If they redo my loan they can take that loss off their books as well and they still have good payments coming on on the remaining loan. - jb

Why should they refinance at a lower rate and principal, when you're paying.

[jeb]

Haven't make a payment in 2 months.

This afternoon they said they would 'TALK' about a redo on the loan IF I first bring the back payments up to date.

In other words, I now pay some $700.00+ and then they tell me what they will do - if that is something I don't like, I am out the $700.00. Real hard decision - not! - jb

[justbroke]

Haven't make a payment in 2 months.

This afternoon they said they would 'TALK' about a redo on the loan IF I first bring the back payments up to date.

In other words, I now pay some $700.00+ and then they tell me what they will do - if that is something I don't like, I am out the $700.00. Real hard decision - not! - jb

Now, THAT would irritate me... and I see your frustration. Ignore my prior posts on the subject.

[StartingOver08]

jeb, it seems your best option is going to be to surrender the vehicle since they are not working with you on the payment. You are filing BK right? Then just put the car in the petition, save your money to get one after you file.

[MomIcantFindmy]

Be careful with USAA..for some people (I think it may depend what state you live in) they also cancel your insurance with them. In our case...we BK'd and included them (10K) and they refused to renew the policy at the end of the term.

[jeb]

I guess what really ticks me off is that I have had one type account or another with USAA for some 47 years now - and had always had great respect for them.

And, yes, Startingover, I am filing.

But I am in FL and trying to figure out how to cover about 4 grand in cash that I was not expecting to have when I started all this. Was hoping I could pay down the USAA car loan and redo the loan for lower payments. That is the only secured loan I have that I can do this with, according to my Attorney.

If I file with this money the trustee will take it as there is no way to cover it in FL - no wild card.

We are discussing not using the homestead exemption since I have no equity and thereby picking up an extra 4 thousand that way but my Attorney says no one he has talked to has heard of this being done.

I am also looking at buying another vehicle with 4 thousand down if I can finance one and then letting USAA have this one but my score has gone from the mid 700's last month to 609 today. Have a finance guy at Toyota working on it now.

Oh, well - worse case is I will lose the 4 grand of cash - didn't expect to have it anyway. - jb

[woodburner]

Jeb, As a USAA member for so long, you probably have a chunk of money in the subscriber savings account with them. Have they indicated what will happen to those funds? I know normally you can't touch them until you are no longer a member.