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Student Loans 90 day lates

Anonymous
Not applicable

Student Loans 90 day lates

Hi All,

 

I hoping I am posting on the right board here. But below is a run down of my situation. I am applying for a mortgage and the six 90 day lates for student loans through MOHELA (1 payment 6 loans) are really hurting my score.

- My account was approved for forbearance for the period of the lates to bring my account current.

- My promissory note states that any forbearance eliminates any deliquency

- I have contested through the CFPB and my states attorney general

- Mohela still states that their reporting is accurate

- My states Attorney General gave me a free law firm to call if I want to pursue it further.

 

I have been in touch with the CEO of Mohela to get some answers as its their duty to provide updated and accurate information. My question is how could the deliquencys they report still be accurate if the are eliminated through the forbearance.

 

I dont have time to get this updated so my interest rate is going to be higher than it would have been. If I am going to pursue legal action, should I request my banker to give my the total interest paid at my current rate and total interest paid if my credit scores were 50 or so points higher. Note I will post this on the mortgage board as well.

 

Any advise is greatly appreciated

Message 1 of 10
9 REPLIES 9
calyx
Super Contributor

Re: Student Loans 90 day lates

Welcome to MyFico, @Anonymous !

 

When you are speaking about federal student loans - they are not just covered by the FCRA, but also must report in accordance with another law, known as the HEA (Higher Education Act), which supercedes the FCRA.    Those lates, when you acquired them, were accruate if your account wasn't already in forebearance.   I assume that you were granted "retroactive forebearance"  - and what that does is just bring the account accurate for accounting purposes - it means you don't owe the money were delinquent on as well as current payments to bring the account current.

It does not remove the lates, because you were still delinquent when that occurred, and the HEA says that the reporting has to stay accurate.   So when you say " its their duty to provide updated and accurate information," that's exactly what they're doing, per the HEA.

" If I am going to pursue legal action, should I request my banker to give my the total interest paid at my current rate and total interest paid if my credit scores were 50 or so points higher."

You won't win a lawsuit because they are not causing you damages, they are following federal law.

I know it sucks, and the language could be better.    I wish you all the best in your efforts to get the lates removed, but from a strictly legal standpoint, they are right to report them.

Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 2 of 10
Anonymous
Not applicable

Re: Student Loans 90 day lates

I uderstand that there are seperate acts but I read an article that the third circuit said the even loans under the HEA have to adhere to the guidelines of the FCRA. Link to article is below 

Article 

Message 3 of 10
Anonymous
Not applicable

Re: Student Loans 90 day lates

Hi @Anonymous while I generally defer to @calyx's expertise, I must admit based on my quick once over of your post and the article, I'm intrigued with the theory. 

I think you should fight it- if you have the energy to see it through. Your method of calculating the impact seems sound to me. It's definitely a long shot, but I'm rooting for you.

Message 4 of 10
calyx
Super Contributor

Re: Student Loans 90 day lates


@Anonymous wrote:

I uderstand that there are seperate acts but I read an article that the third circuit said the even loans under the HEA have to adhere to the guidelines of the FCRA. Link to article is below 

Article 


I see what you're saying, but it's also correct under the FCRA (servicers usually just refer to the HEA since it tends to be stricter).

Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 5 of 10
calyx
Super Contributor

Re: Student Loans 90 day lates


@Anonymous wrote:

Hi @Anonymous while I generally defer to @calyx's expertise, I must admit based on my quick once over of your post and the article, I'm intrigued with the theory. 

I think you should fight it- if you have the energy to see it through. Your method of calculating the impact seems sound to me. It's definitely a long shot, but I'm rooting for you.


^ I would continue trying to get them removed, too.   You have nothing to lose by doing so (imo).    I would LOVE to see different language for when accounts are brought current so that it's easier for the lay person to understand, and people fighting for what makes perfect sense might be the best way to make that happen.

Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 6 of 10
Anonymous
Not applicable

Re: Student Loans 90 day lates

Thanks @calyx and @Anonymous 

I think what really helps me in this case is my promissory note has language regarding forbearance eliminated deliquencies. And since my forbearance covered the period in questions, that deliquency is eliminated.(IMO)

 

I do intend to do everything I can to get this removed. I sent the Attorney General the info about my promissory note, as i didnt see it initially when I reached out to them. I will see what they have to say about that. 

 

What I found frustrating about this whole process is basically every group I reached out to couldnt give "legal advice"

My work offers this as a benefit but I am not signed up for it so I may look to enroll next year.

Message 7 of 10
Anonymous
Not applicable

Re: Student Loans 90 day lates


@Anonymous wrote:

Hi All,

 

I hoping I am posting on the right board here. But below is a run down of my situation. I am applying for a mortgage and the six 90 day lates for student loans through MOHELA (1 payment 6 loans) are really hurting my score.

- My account was approved for forbearance for the period of the lates to bring my account current.

- My promissory note states that any forbearance eliminates any deliquency

- I have contested through the CFPB and my states attorney general

- Mohela still states that their reporting is accurate

- My states Attorney General gave me a free law firm to call if I want to pursue it further.

 

I have been in touch with the CEO of Mohela to get some answers as its their duty to provide updated and accurate information. My question is how could the deliquencys they report still be accurate if the are eliminated through the forbearance.

 

I dont have time to get this updated so my interest rate is going to be higher than it would have been. If I am going to pursue legal action, should I request my banker to give my the total interest paid at my current rate and total interest paid if my credit scores were 50 or so points higher. Note I will post this on the mortgage board as well.

 

Any advise is greatly appreciated


Does your promissory note specifically state it removes delinquencies from your credit reports (credit reporting agencies) or just a vague "delinquencies". If it does not specify credit reporting agencues, I would tend to think it to be like any retroactive forebearance where it applies to your actual account and internal reporting and not to the credit bureaus.

 

While you should continue to fight it, keep expectations in check. Retroactive forebearance is to help your account, not your credit reports, and means you did not try to handle things preemptively, but rather until after things went south. I am not trying to be harsh, but the HEA is strict and it is difficult to get lates removed. If the promissory note does soecify credit reporting agencies, I would fight it tooth and nail until they are removed.

 

If things look like they are getting hairy in the future, make sure to request forebearance well becore lates start hitting your account(s) and then your credit reports should likely not be impacted.

Message 8 of 10
Anonymous
Not applicable

Re: Student Loans 90 day lates

Thanks,

 

Could someone point me in the direction of the HEA reporting requirements. I've tried google and cant find anything.

Message 9 of 10
calyx
Super Contributor

Re: Student Loans 90 day lates

You can do a quick google to come up with a number of sources that have the text.
I like this one, as it's straight from the proverbial horse's mouth and includes the amendments:
 
https://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title20-chapter28&edition=prelim

 

 

 

Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 10 of 10
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