Federal Student Loan Rehab – The Law and You .. please read

Feb 182011
 

there have been many posts recently regarding SL rehab and i think some of you guys are not fully understanding what this means. 

 

in short, after you rehab a loan, the CRAs are required to remove the DEFAULT STATUS ONLY.  see below for the exact language.

 

they will not delete your defaulted loan history.  they will not delete your lates.  they will not delete the tradeline. 

 

what happens on your CR is this…

your loan status field is changed to PAID OR PAYING AS AGREED, the loan balance will be zero, and the loan will be closed and possibly marked TRANSFERRED TO ANOTHER LENDER in the remarks field. 

the closed loan will stay on your report for 7 years from the date it was closed, and the lates will fall off 7 years from the date the late payment was due.

 

on the bright side, you reset the 10 year maximum loan repayment period  and your new loan will stay on your report until paid in full plus 10 years.  so the new loan it will outlast your old loans and if you pay on time every month you will have the positive history for much longer than you will have the negative history.  also, any privileges lost by going into default are restored, and adverse actions such as wage garnishment and collection activities are ceased.

 

please note that i am not taking into account GW adjustments.  it is possible that down the road you may be able to talk the lender of the defaulted loan into deleting the tradeline, but this is NOT required by law.  they are actually required by law to report accurately, and any GW adjustment or ‘mistake’ in your favor is not the norm.  if you have personal experience to the contrary please chime in.  we’d like to know how you did it.

 

 

 

 

20 USC § 1078–6 (C)

Upon the sale or assignment of the loan, the Secretary, guaranty agency or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency or holder, as applicable, reported the default of the loan, to remove the record of the default from the borrower’s credit history.

 

34 CFR § 682.405   (b)(2)

The guaranty agency must report to all national credit bureaus within 90 days of the date the loan was rehabilitated that the loan is no longer in a default status and that the default is to be removed from the borrower’s credit history.

 

the applicable law for FFEL (stafford) loans is  20 USC § 1078–6, found here http://www.law.cornell.edu/uscode/uscode20/usc_sec_20_00001078—-006-.html

the applicable regulation for FFEL loans is 34 CFR. § 682.405, found here http://law.justia.com/us/cfr/title34/34-3.1.3.1.40.html#34:3.1.3.1.40.4.40.6

the terms for rehabilitation of perkins loans are essentially the same as stafford loans.

Patriotic Readers Club and CA: "It’s Hard Times, INC"

Sep 082010
 

Hoping that someone out there has some officer info on these two companies.  It’s related to a magazine subscription scam (Patriotic Readers Club) and the collection agency (It’s Hard Times) they hired.

 

I’ve got the address info off of the Secretary of State websites for both (Colorado for the scammers, and Minnesota for the CA), but no information about their officers/directors.  Checking to see if anyone already has this info before I pay for it.

 

Also, I haven’t found a single mention of It’s Hard Times on the forum – which leads me to believe they’re either new, amateurs, or not reporting on credit reports.  They’ve been around since 2008, so I’m guessing amateurs.  Thoughts?

 

Thanks!

Certified Recovery Systems, Inc DV Response…Any Suggestions

Mar 062010
 

Ok, I sent the CRSI a DV letter I received their response today:

 

March 3, 2010 

 

client Name: XXXX

Balance Due: XXX

Our Account#: XXXX

 

Dear Ms.XXXXXX

 

In response to you recent correspondence, attached you will find documentation pretaining to the above mentioned account.

Payment should be received in our office within 10 days from the date of this letter.  Your assistance in resolving this matter is greatly appreciated.

 

Attached was a move-out statement with all these charges that I can’t read clearly, but the total is very clear ($932.77); also attached was the rental application; the page of the term to lease from 3/7/2003 to 3/6/2004. 

 

Ok, my DV letter asked for the following:

  • Complete payment history, the requirement of which has been established via Spears v Brennan 745 N.E.2d 862; 2001 Ind. App. LEXIS 509 and
  • Agreement that bears the signature of the alleged debtor wherein they agreed to pay the original creditor.
  • Letter of sale or assignment from the original creditor to your company. (Agreement with your client that grants you the authority to collect on this alleged debt.) Coppola v. Arrow Financial Services, 302CV577, 2002 WL 32173704 (D.Conn., Oct. 29, 2002) – Information relating to the purchase of a bad debt is not proprietary or burdensome.
    • Debtor must phrase their request clearly to obtain: The source of a debt and the amount a bad debt you paid for this debt, how amount sought was calculated, where in issue a list of reports to credit bureaus, and documents conferring authority on defendant to collect debt.
  • Intimate knowledge of the creation of the debt by you, the collection agency.
  • Show me that you are licensed / bonded to collect in my state
    • Section 392.101 of the Texas Finance Code prohibits a third-party debt collector or credit bureau from engaging in debt collection in Texas unless the third-party debt collector or credit bureau has obtained a surety bond and filed a copy of the bond with the Office of the Secretary of State.

    •  

    I don’t feel that what they sent to adequately covers my request.

     

    BTW, I have always disputed this debt because I provided a written notice of 30 day moveout. which I hand delivered on or around 1/30/2004I & moved out 3/1/2004).  their whole argument was that I was suppose to provide a 60 day notice.  but didn’t bring that point up until I turned in the unit keys the weekend after the move out.

     

    Now how should I respond?  this is scheduled to fall of 12/2010, but I’m in the market to purchase a house.  Should I send another DV letter stating that I didn’t ask for verification, I asked for validation that they are authorized to collect on this debt????? Please Help

    Texas SOS – CA Isn’t listed in the SOS Database to have Filed w/the Office of the SOS

    Mar 032010
     
    Just to make sure I’m clear and understand.  I checked out a couple of the CAs that have reported collections on my CR and came back with an “No Record Found”  message.  Does this mean that they are not authorized to collect and/or report my accounts to the CRAs.  Here is the language on the SOS website:
    Section 392.101 of the Texas Finance Code prohibits a third-party debt collector or credit bureau from engaging in debt collection in Texas unless the third-party debt collector or credit bureau has obtained a surety bond and filed a copy of the bond with the Office of the Secretary of State.

    On this site, you can search for individuals and entities that have filed debt collector bonds with the Office of the Secretary of State. The search results will indicate, based on the information filed with the Office of the Secretary of State, whether the bond is active, pending cancellation, or has been cancelled. All fields displayed are searchable.

    I’ve searched by name, address and abreviated names and still the same “No Record Found” message.  Could I use this for leverage?