FFEL Loan Rehabilitation

[DavidBradley]

As I understand it, after I complete my 9 consecutive payments (I'm on #7 now) then an 'eligible lender' has to purchase my loan back in order for me to officially complete my 'loan rehabilitation'. However, my guarantor (USA Funds) told me that no lenders (i.e., Sallie Mae, my original lender) are buying back the loans given the current state of the economy...so it appears that it is impossible to successfully complete loan rehabilitation even if you play your part and make 9 consecutive, on-time payments!!!

 

Unless...

 

What if I went to my bank (which happens to be Bank of America, and who happens to be on the FFEL lender list) and strike a deal by GIVING THEM the money to purchase my loan back so that I can complete rehabilitation? It seems that if I give them the money up front (in exchange for the paperwork indicating that they will help me finish my loan rehabilitation program) then it would remove all of the risk that they might incur by buying my loan back. At face value, it sounds like a slam dunk - no?

 

My balance owed is only ~$1k and I'm trying to buy a house so I'll do anything to put this behind me! I REALLY need to finish the rehabilitation program so that the dings (default stuff) will be removed from my credit report.

 

So, does this sound like something that might be feasible with a little 'elbow grease' on my part to find someone at BofA willing to work with me? Or am I just dreaming that this would be a possible solution to all of my problems.

 

Thanks!

[LynnInMN]

As I understand it, after I complete my 9 consecutive payments (I'm on #7 now) then an 'eligible lender' has to purchase my loan back in order for me to officially complete my 'loan rehabilitation'. However, my guarantor (USA Funds) told me that no lenders (i.e., Sallie Mae, my original lender) are buying back the loans given the current state of the economy...so it appears that it is impossible to successfully complete loan rehabilitation even if you play your part and make 9 consecutive, on-time payments!!!

 

Unless...

 

What if I went to my bank (which happens to be Bank of America, and who happens to be on the FFEL lender list) and strike a deal by GIVING THEM the money to purchase my loan back so that I can complete rehabilitation? It seems that if I give them the money up front (in exchange for the paperwork indicating that they will help me finish my loan rehabilitation program) then it would remove all of the risk that they might incur by buying my loan back. At face value, it sounds like a slam dunk - no?

 

My balance owed is only ~$1k and I'm trying to buy a house so I'll do anything to put this behind me! I REALLY need to finish the rehabilitation program so that the dings (default stuff) will be removed from my credit report.

 

So, does this sound like something that might be feasible with a little 'elbow grease' on my part to find someone at BofA willing to work with me? Or am I just dreaming that this would be a possible solution to all of my problems.

 

Thanks!

 

Yes, under the Higher Education Act you can bring your own lender. However from what I have heard, BOA is not funding rehabs either Plus I dont believe that "securing" it with your own funds will work either...BOA is just too big and quite frankly they are just not going to be bothered for just a $1k loan....plus securing it would cause additional complications.

[DavidBradley]

Thanks a lot, Lynn, you've been a lot of help!

 

So, if lenders aren't buying back the loans and I need a lender to buy back the loan in order to finish the rehabilitation process, how do I actually go about completing loan rehabilitation? I thought my idea might work but I agree that the big bank may not want to deal with it.

 

The majority of the dings on my credit are from USA Funds, so I really need to finish rehab to get these removed so that I can qualify for a home loan. What can I do?