My husband and I are at the point where we are thinking we can finally afford a house.

The way I understand it, you can't qualify for any First Time Homebuyer programs if you have student loans in default - well, he has 2 - The 9th payment for the first one will be made in Oct. and the 9th payment for the other will be in Feb. 08.

I was thinking that by Feb, since his loan would be out of rehab, we could look to buy a house. But then I read that it can take up to 90 days for the loan to be reported as out of default and in repayment? Is there a way to speed up the process?

Does the loan have to be picked up by a new lender before it can be reported as out of default? I know we need to make the payments even after the 9th payment just to make sure we don't get behind, but I'm fuzzy about when the loan is reported out of default.

I know practically nothing about mortgages and first time homebuyer programs, so any help in these areas mixed with the SL questions would be appreciated! I just know I want to quit renting ASAP and his defaulted loans are holding us back.

I know the feeling; I'm wanting a house, too, and my loan just came out of default. I came out of default Aug. 30 (they took the Aug. 30 deduction from my checking account, but transferred it to my new lender) and I received my coupon book 2 weeks after that with my first payment due Oct. 1. I pulled my credit reports on Sept. 5 and I wasn't reported out of default at that time. I plan on pulling early to mid Oct. to see what it looks like then. I've seen some people state the default was gone from their report in a matter of days; some it took a couple of months.

Since they're allowed the 90 days, I don't think you'll be able to hurry them, but I noticed on my lender's website (www.salliemae.com) there is a way I can print the status of my account online for a mortgage lender. You might be able to give them that, since by the time you find a house, get all the paperwork done, etc., it'll probably be off of the report.

Actually, the 9th is Jan, not Feb! That's sorta good... I mean, end of Jan, but still.

The "rehab agreement" they sent did not mention it would take 90 days to remove the default - it just says "Upon rehabilitation, the major national credit bureaus will be notified to delete any adverse credit rating being reported by the guaranty agency in relation to your default." Now, will this be both entries on the CR because for every 1 defaulted SL he has 2 separate negative entries...

Are your new payments larger or smaller than your rehab payments? The total of the 2, for us, is about $220 - I'm wondering what they might be after rehab...

My understanding, from what I've read here, is that the one I have for USA Funds (the ones I've been having the rehab with) will disappear, but the old one I have with Sallie Mae that I defaulted on that shows my old lates will not. What I'm not sure about is how it will show now, since I'm back with Sallie Mae-if it will update the old account or show a new one. I'm still on a learning curve myself, but there's a couple of people on here that either do or have worked in the student loan industry. I do know that student loans have to report accurately by law, be it good or bad.

I was paying approximately $310 for rehab ($260 garnishment, $50 directly) on a balance of around $18,500. My balance is now $17,200 and I'm paying $234.44 a month for 109 months.

Wheeee! 1 loan is out of rehab and only 3 months on the other!

Haven't seen any change to his credit reports/scores...

I contacted Pioneer and they said Direct Loans picked the loan back up, called Direct Loans, but it's not showing in the system yet. In the meantime, I am going to make the payment for this month and keep checking the DL website that shows account activity.

Can I send the CRA's a dispute letter for the loan that is out of rehab to try and speed up the process? Is there any way to turn the first negative tradeline (when it originally went to default status and shows closed) into a positive or at least neutral?

I have 3 loans with citi and 4 with sallie mae. They were showing in deferment, which they are! and I logged on to TU and disputed all 7 of them as incorrect payment history 30 days later since the start of my loans to present have appeared payed as agreed. I am only making small payments on the citi accounts.
So its worth a shot.