Sallie Mae Letter -- Retroactive Forbearance

[moriah]

Okay, so PFBed Sallie Mae over lates showing during a period of retroactive forbearance on only TU and EX.

 

They confirmed the dates that the loan was in forbearance status, and then said that all previous lates were null and void, and that as far as they are concerned the loan has never been late.

 

However, they said that if they reported during those months that I was late, they can't retract the information.

 

*big friggin confused look*

 

Either way, I'm thinking the way to play it is to dispute, saying "Received letter from Mr. ***** confirming loan was in forbearance from ____ to _____ and Sallie Mae is not currently reporting me late for those months."

 

All of that is true. Maybe the CRA will just remove the lates since I'm claiming to have a letter from them. I do. I don't want to put the letter in the dispute since it also said Sallie Mae won't retract lates already reported even if according to them I was not late during those months due to the retroactive forbearance. It's worth a shot -- if nothing else, perhaps the person who gets the ACDV will not want to disturb Mr. Bigwig and just remove the lates.

 

Worth a shot, right?

[LynnInMN]

This is why I have always been of the opinion that retro forebearances are useless. They will back date your forebearance on their books, but not on the CR. There is no legal obligation for them to do so. That is why it is my belief that forebearances should only be used going forward....not backwards.

[moriah]

Yeah, well, I was really bloody stupid when I did it, but it was way before CB. The lates are almost two years old now.

 

He also cited some law stating the regulations they are required to fulfill -- I'm going to read the entire section to see if there is anything that says they have to report to a CRA.

 

The last line said "We cannot and will not retract the information" -- there's a big difference between cannot and "will not".

 

If they don't play ball -- can you do loan consolidation on one loan and go to a different lender? I'd be willing to do it, if they're being such jerks I don't want them to have any more of my interest money.

[LynnInMN]

It is not just Sallie Mae...it is all the student loan lenders that follow this policy. Would your credit card or car loan company backdate a deferment??? No way...and they are sure as hell not going to change your CR for you either.

 

Retro forebearances are a courtesy, not a right. They will only change the CR when they are at fault. Did you not file on time??

 

 

 

Are all your loans currently with Sallie Mae?? If so, you would be bound by the single lender rule.

[moriah]

"Retro forebearances are a courtesy, not a right."

 

And that's exactly the way I put it in my PFB letter -- that I very much appreciated them being willing to work with me, but that it is adversely affecting my credit report and that my understanding from the person I filed the forbearance with was that doing it retroactive would eliminate the late pays from the credit report.

 

It's what I was told, or I would have attempted to have the forbearance extend further into the future as I had only *just* started a job and had been unemployed before.

 

I filed late because I didn't actually realize my loan had gone into repayment. I had taken summer semester courses and thought my six months would start from the end of that term -- August, making the repayment period start in Feburary. However, I had to drop a class, and I guess that put me below half-time, so I goofed. I'd also moved (seperated from ex-husband) and my ex threw away all of the mail I got there. I guess they called him on the phone and got my number from him, because I only found out it was late by a phone call.

 

Believe me, I felt really really stupid that I got into this mess.

 

But what really chaps my hide is that if I had defaulted instead and then went for rehabilitation, my credit report would be clean now (I've been paying on time for almost two years now.)

 

*sigh*

[LynnInMN]

But what really chaps my hide is that if I had defaulted instead and then went for rehabilitation, my credit report would be clean now (I've been paying on time for almost two years now.)

 

This is where you are VERY WRONG!!!!!! Only the guarantey agency who pays your default claim is REQUIRED to erase the negative tradelines. You would have been stuck with Sallie Mae defaults until the SOL on them ran out!! The lender is under no obligation to remove negative information.

[moriah]

Hurh.

 

I must have *really* misread this:

 

"You may also be interested in participating in the loan rehabilitation program. After you have made 12 consecutive monthly payments that are both reasonable and affordable, we will agree to reinsure the loan. You will then be eligible to have the loan purchased by a lending institution. Once a loan is rehabilitated, it will be taken out of default, the credit bureau reports made by the servicing agency will be deleted, you will be able to repay the loan over a 9 year period, and you will again be eligible for additional Title IV student financial aid funds."

 

That's from http://www.ed.gov/offices/OSFAP/DCS/rehabilitation.html

 

I saw the "servicing agency" as the servicer of the loan, not the guarantor.

 

Oh well. If that really was the way it worked, I was going to be very, very unhappy.

[ziggypop]

Hurh.

 

I must have *really* misread this:

 

"You may also be interested in participating in the loan rehabilitation program. After you have made 12 consecutive monthly payments that are both reasonable and affordable, we will agree to reinsure the loan. You will then be eligible to have the loan purchased by a lending institution. Once a loan is rehabilitated, it will be taken out of default, the credit bureau reports made by the servicing agency will be deleted, you will be able to repay the loan over a 9 year period, and you will again be eligible for additional Title IV student financial aid funds."

 

That's from http://www.ed.gov/offices/OSFAP/DCS/rehabilitation.html

 

I saw the "servicing agency" as the servicer of the loan, not the guarantor.

 

Oh well. If that really was the way it worked, I was going to be very, very unhappy.

 

Yup, it's just the guarantor. What can make it even worse is that in some cases (I don't know if this is the case with every guarantor, but it was with mine), the guarantor may only put one TL on your report, while your lender can have MANY and none of those are the ones that are necessarily changed. So, you could have 16 majorly negative TLs on your report and one slightly more positive TL (and even that only HAS to have the default notation removed) -- and because the default penalties and fees are on your account while you're paying during rehab, you can end up paying A LOT more than if you hadn't defaulted. I know that rehab sounds like a good deal (and it really is if you default), it's a lot better never to default in the first place. In a manual review, I would imagine that some lenders (the ones that know about SLs anyway, and that's not all of them by any means) know perfectly well what it means when your lender shows a whole bunch of lates and then you have a guarantor TL on your report, even if it doesn't say "default" anymore.

 

You may want to do a search here and see if anyone has had any luck with getting lates removed by the CRAs after getting a retroactive forebearance with SM. It can't hurt to try. SM is pretty notorious for not listening to goodwill requests, although, again, some have had luck with them -- it's pretty hit or miss, though. How bad were your lates? While that's obviously never a good thing to have lates on your reports, their effect drops after a couple of years, although how much depends on any other "baddies" on your report.

 

Like Lynn says, the retro forebearances are pretty worthless (and I fell for it, too). You're limited in how much forebearance time you have and if you're already late, it does NOTHING except sound like it's going to help. I really don't understand what they're for at all.

 

Hope this helps!! Good luck!!

[direred]

The retro forbearances are useless from a credit score standpoint, but I assure you, the one time I needed one, it saved my flowers because I didn't have the $ to pay all the back payments right then (I'd moved and not realized that the deferment paperwork hadn't gotten to where it needed to go and it took a bit to catch all that up).

[ziggypop]

The retro forbearances are useless from a credit score standpoint, but I assure you, the one time I needed one, it saved my flowers because I didn't have the $ to pay all the back payments right then (I'd moved and not realized that the deferment paperwork hadn't gotten to where it needed to go and it took a bit to catch all that up).

 

 

Makes sense to me! Thanks for the info -- I wondered what the point of them were (I figured there must be *something*, just couldn't figure out what it was!).

[moriah]

If that was the entire point of them, heck, I could have fixed it without a retroactive one.

 

Lates got to 120 days before I heard anything (as I said, I expected the grace period to end that Feburary or March and it had ended in October. Stupid me) -- they called, I had just started a new job, and I paid three months of payments in one day that day. I gave them my current address and asked them to please send me a reminder and I'd do another "three payment in one" payment the next month to be entirely caught up.

 

When they called the next month and I offered the check by phone for the next triple-payment, they said "Look, I know it's tough and you did just start this new job, why don't we just give you a forbearance, we can backdate it so your credit doesn't suffer."

 

So I took them up on it.

 

If it wasn't going to make a difference on my credit history, then they should have started the retroactive forbearance in January not October (as I'd paid three months of payments) it would seem.

 

Either way, if I want a letter to give to the CRAs saying the loan was in forbearance during that time, I can probably just very nicely call them and ask the phone operator to send out a letter verifying the months the forbearance covered.

 

One thing I do not understand -- and this may be one of those weird interpretations of the law that the plain-language aspect of the FCRA is trying to avoid... They said that if the lates were correct when they reported them that they can't change it. Furnishers have a duty to update, and not to provide incomplete information. Saying I was simply late is incomplete -- those months were also covered by a forbearance and that is not noted.

 

Also, the idea that previous correct reporting does not have to be updated is weird to me. Under that logic, they don't even have to change the amount owed after a payment -- after all, the previous balance was correct.

 

EQ is showing this TL the way the phone operator agreed it would. I know that it had those lates on there before, but the next month after the forbearance was processed, they vanished. It's only EX and TU that still report them, and they don't even report the same months as the same lates.

 

Either way, I disputed saying "Have letter from Sallie Mae stating forbearance from ____ to ____." (Gotta love online disputes, where you can't put in much info....)

 

We'll see if it works.