omskillet - I am not defending A, B, or C's stance.   

But I do agree that A does not have to remove the lates.   They are reporting accurately.

B could have left the tradelines on there.   You can call them and ask them to report the TL with a positive history.  (I'd be careful with that one though.   I'd hate to see any negatives come back from B.)

C is reporting it as a new loan, all good.   Although it hurts the AAofA right now, in the long run, its going to be a better help for your score and linger long after the old TL drops off.

I think - and I could be  wrong - that if the A still had the loan when you rehabbed it, THEY would have cleared away the negatives when they sold the loan after rehab.  That is what happens for a lot of people - that their original lender still has it when they rehab.  B should have explained that to you.