My process on Rehabilitation with my defaulted school loans

Jan 292011
 

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 :)

Student Loan sent to CA (offering rehab)

Aug 112010
 

Any help/advice would be appreciated.  I had two student loans (CSA) that went into collection (progressive) and has been in collection the past 4-5 yrs.  Each loan amount is only $2000 each and the CA offered a rehab program (9 month payment) at which time, the negative report will be removed.  I heard from the board that the government offers rehab program and wanted to know if the rehab program offered by the CA is legitimate.  I know that paying off the collection will result in the negative being in my CR for a long time and wanted to know if the rehab program the way to go.  I also wanted to know what the monthly payment would be for joining the rehab program.

 

Thanks a bunch.

 

 

Trying to enter Student Loan Rehab, but not sure I am really entering Rehab program

Mar 092010
 

hi,

 

I’ve been lurking for a long time, but now I need help that I can’t seem to find my lurking only.

 

My 2 student loans went into default on 5/13/2007.  Yesterday I sent an e-mail to the company I believe is the guarantor, American Student Assistance, (ASA) asking about their rehab program.  This morning I received a response from the Borrower Advocate, stating I should call the main number and use option 1.

 

After an hour or so of debating my next stepsI called and spoke to a gentleman.  He was not very helpful, but not horrible eitherthank goodnes.  I asked to get into the rehab program and he told me I cannot be accepted into rehab until I make 9 payments on time, and asked when can I make the first payment. He asked for $100 per month, but since I have not worked since Oct 2008 I told him I could not pay that much monthly right now.  He agreed to $75 per month, I told him I would send a money order when I receive something from ASA.  He told me he would send me a statement today, but I would not get anything about rehad until after the 9th payment is received.

 

This just seems a little odd.  Shouldn’t I receive some paperwork stating the terms of rehab first? 

 

Without this forum I would never have known about rehab, and I would still be afraid everytime the phone rings.  Thanks so much for helping me get this far.

 

 

will I EVER get out of rehab?

Feb 222010
 

I’ve been in the rehab process since June 2008.  I was told there may be a lender in October; no dice.  Now I’m being told maybe in the spring. 

I want to apply for a home loan and don’t know what to do.  I know consolidating will tank my scores, so I can’t afford that – but I’m sure FHA will turn me down for a loan if I’m still in rehab.  I don’t have any negative tradelines for student loans showing anymore, so I probably won’t see a FICO bump (unless it’s for updates on timely payments). 

This really sucks.  I feel helpless.

I owe the dept of ed $2,500. How should I pay this to best help my FICO score?

Feb 122010
 

I have one loan that is listed as owed to “US Dept. of ED/FISL/SF” for $2500 it was opened 8/03 and EQ shows last activity on 4/05 it is listed as 120+ past due. I want to pay this off but in a way that is going to have the most positive impact on my FICO score.

 

Should I just call the dep of ed and pay it?

 

Should I ask for a PFD?

 

Should/can I get it in the rehab program?

 

What is going to be my best course of action here? 

Ok, got into Rehab Program…what to expect next?

Feb 092010
 

So after many calls, I finally spoke to the Collection Agency holding my husband’s student loan. I asked them if they could put a stop on the wage garnishment (received an “approved” decision after his hearing to garnish his wages, but hadn’t yet come out of his check yet) and she said “Sure, that won’t be a problem!” with excitement in her voice. For some reason I thought we were going to face a much more challenging road, but I was happy. She happily set up the rehab program. Since his debt was $44k and said they required 10% down (which would be $4400 and then monthly payment) but said that she talked to her financial advisor and could do $1600 total for this month and next month (and would count towards 2 monthly payments of the 9. And then it would be $337/mo thereafter. She said after the 9 months were up, it would go back to the lender to try and sell and they would take the default off his credit report. I asked about the market and the probability that he’d get picked up and she said there have some some waits but it WILL get picked up. Note: This is for Oklahoma Student Loan Guarantee

 

My question is, do you think it will get picked up at the end of this year? I thought I heard about a bill that Obama was signing or DID sign to allow loans that have been rehabbed but not found a lender to be sold to Direct Loans or something?

 

My other question is say he does complete rehabilitation at the end of this year, if we were to buy a house the following year, would his credit be clear to get a loan thru FHA? Would there be anything on his credit that wouldn’t qualify him for the loan? Do you just have to wait 30 days or so after rehab to have it clear up on your credit?

 

I’m just so happy that we were able to stop the wage garnishment and get on the rehab program. I’ve heard alot of great things. Hopefully after this is all said and done, we’ll be able to get our house :)

Investor Rehab Financing Explodes With Lift of FHA 90-Day Flip Rule

Feb 092010
 

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Investor Rehab Financing Explodes With Lift of FHA 90-Day Flip Rule
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Rehabilitation Complete

Feb 082010
 

Here is my situation…. I just recently rehabilitated 2 student loans, while my wages were being garnished. Luckily, I make pretty good money and should have done this loooong time ago. When I completed my rehab they were sent back to the Fed.Student Loan Servicing Center and  my garnishment stopped. As soon as, I recieved the letter of completion I checked my credit reports, which I was currently in the high 500′s (I know sux) and notice that my credit score increased and placed in my the mid 600′s. My Fico is currently reporting 646, but has only removed all bad data/bad payment history from one loan and not the other loan that was rehabbed at the same time with the same CA company.  Direct loans currently show both loans are current and paid as agreed. 30 days has passed since I recieved m rehab letter and equifax is still reporting the defaulted loan. Any words of wisdom???

 

I went to equifax and did the dispute thing and talked to DL and they say that the info was sent out and should be update….

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