Mortgage and Insurance

I’m brand spanking new to this forum and I have to say, its freaking amazing. It’s comforting to know that I’m not alone on the issue of trying to fix/rebuild my credit. Well, here’s my 2cents on the Rehabilitation Program for defaulted school loans. Any advise, tips or comments to help me on my situation is more then welcomed as well.

Back in June of 2008 I went into default with USA Funds, Inc. who was my creditor for my school loan. I entered to do a Rehab program with General Revenue Corporation (GRC) and completed it with no problem. 2 months later, my defaults with USA Funds were deleted off my credit record BUT my prior negative reports with Sallie Mae, before USA Funds took over, were still showing delinquencies. So I contacted Sallie Mae, their response was, “WE CANNOT DELETE ANY NEGATIVE/DELINQUENCIES PRIOR TO YOUR DEFAULT DUE TO SALLIE MAE’S POLICY BUT YOUR DEFAULT STATUS WERE DELETED.” Which then got me REALLY confused and feeling cheated because before I agreed to do the Rehab, I was told by GRC, that my default AND my negative/delinquencies prior to default were GOING to be deleted and brought up to a clean, paid on time records.

So I called Sallie Mae and requested a letter that states my completion of the Rehab Program and as soon as the letter arrived the letter stated this:

Dear **********,

Sallie Mae, Inc. is a servicer of student loans for national and state guarantee agencies.  We are pleased to inform you that you have successfully completed your rehabilitation program as of 06/24/2010. Your education loan(s) listed below was purchased by the lender and is no longer in default.

The guarantor, United Student Aid Funds, Inc., will notify the national credit bureaus to delete the defaulted status. As a result of your rehabilitation, the lender/servicer that maintained the loan(s) prior to this default will be notified. It will be their responsibility to correct any adverse credit reporting that they may have made.

 

The letter quotes, “The guarantor, United Student Aid Funds, Inc., will notify the national credit bureaus to delete the defaulted status.” which USA FUNDS, Inc, held their side of the bargain and deleted them asap! BUT this portion of the letter, quotes, “As a result of your rehabilitation, the lender/servicer that maintained the loan(s) prior to this default will be notified. It will be their responsibility to correct any adverse credit reporting that they may have made.” Now, is it not Sallie Mae’s responsibility to fix my past adverse (negative/delinquencies) reporting as the letter from USA Funds, Inc., Quotes? Sallie Mae were my original school loan creditor before transferring over to USA Funds, Inc. 

 

So I did some research and found this:

 

“Because the statute specifically refers to a stream of 12 payments as determined by the institution, the institution must work with the borrower to determine a payment amount that is appropriate. The statute does not require a signed rehabilitation agreement. In accordance with the 1998 Amendments, once the loan is rehabilitated (after the 12th payment has been made), the institution or its servicer must request that any credit bureau to which the defaulted loan was reported remove the default from the borrower’s credit history.  The borrower is brought current and is no longer considered to be delinquent or in default. Removing the default is consistent with the requirements of the Fair Credit Reporting Act (FCRA), which requires that an institution correct and update the information it furnishes to a credit reporting agency.”

 

- The Higher Education Act

 Section 674.39 Loan Rehabilitation

 

For full article of the law that states this claim, Google the above source, as I lost the link to the site. Sorry

So, in your guys opinion, does it seem like Sallie Mae is obligated to make the changes to my credit report? and I have the upper hand? If so, how should I approach this to where they can’t argue back and fix the issues.

I hope what I provided is of some help to others in a similar situation and if I find out anything else, ill be sure to post it up here for everyone.

Any advise, legal advise, tips or comments will be greatly appreciated. Thanks

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