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

[Anonymous]

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

[Jazzzy]

Hi lisaf,

I gave this a gentle bump so that hopefully someone will come along who has been through rehab and knows how it works when you finish the program.

From what I know (which isn't much), I think his late payments will be gone, and you should be good to go for a home loan. Keep in mind that there is always a time lag in getting things reported. You probably don't want to start looking at homes until you know his reports are clear.

I am so proud of you guys! Feels good to be on the right track, doesn't it?

[Bocklin]

Last year in February I started accepting responsibility for the choices of my youth. I maxed out student loans in college, and never actually made it to the point of repayment. I felt overwhelmed. My Credit scores were barely above 500 (like 505/525), and I was in default with two student-loan lenders on balances near $60,000. With the default penalties, it was over 70k. I went through 10 months of SL rehab, paying $600 a month, and after it was done, the penalties were completely forgiven, and the loans went back to each individual lender. Now, when I pull my credit report, I show no late payments on student loans since 2005, and only with 1 of the two lenders. My account histories are current/paying as agreed on all my loans.

SL rehab is a wonderful thing. My scores after rehab were up over 130 points (11 mos later).

I pulled credit reports before rehab. Those should have all of my 30/60/90/120 day late payments on it. I've yet to compare the before and after, side-by-side, but I'd be happy to let you know how it worked out, and post more info here.