To Lizardking-student Loan Rev

I had three loans with Sallie Mae that were approximately 60 to 90 days past due when a final demand letter was sent to me. The final demand letter (or FDL) essentially is Sallie Mae's way of telling you your loans are accelerated and you have to pay them all back in full or go into default with 30 days of mailing of the letter. I protested to no avail. So, Sallie Mae sent a default claim to the guarantor (Northwest Education Loan Association--NELA), which was rejected because the loans were only 122 days past due by their crappy calculations. They had to be 150 days past due before acceleration. Also, NELA directed Sallie Mae to limit interest to 90 days and send out new final demand letter. Well, Sallie Mae didn't do it and resubmitted the default claim a second time. Meanwhile, I didn't know any of this was going on. I was in school and thought I qualified for deferment, but also knew their were questions about the default status. I couldn't get a straight answer and didn't know what to do. Eventually, NELA approved the default claim, even though a final demand letter was never sent out limitting interest, or allowing me to make regular payments to cure the delinqency and NELA knew it. They paid Sallie Mae about 10,200 to settle the claim, but billed me for 11,000, making a quick 800.00 on the difference, which they now characterize as a penalty to Sallie Mae for procedural violations. So, eventually I got into a repayment plan through a collection agency the guarantor sent the loan to, made 9 on time regular payments and got the loans consolidated with a regular lender (kind of--it was a sister corp to NELA). But after that I kept on finding an outstanding balance of 3500.00 on my consumer report. I disputed it numerous times, got letters in '97 and '99 stating my loans were paid in full. But the stuff showed up on credit reports with Equifax, Experian, and Trans Union. It would go off and come back on. It is a long story. I eventually realized that even if the balances went to zero, Equifax would still report me with an I5 status. The people at Fair Isaac told me the primary component to credit score was the status, not the balance. The FCRA requires status to be updated, so I can't figure out why Equifax insists on leaving the I5 status even after the debt is paid in full. It is clear there is some sort of punitive thing going on there, not merely accurate reporting. Anyway, after 13 letter to NELA about the status and outstanding balances in 1999 and early 2000, I got fed up and filed a lawsuit. I now know through discovery, the way their computer system works is like this. If a consumer disputes their credit report of outstanding balances, they check their system and see if the debt is with a collection agency. If it is not, they change the status to PD, which is a metro status code for "paid." However, if a balance still remains in their screen, they are supposed to write the balance on the dispute and send it in to the credit bureau. So, "paid" does not mean paid. I now know paid only refers to principal balance. It turns out NELA was trying to charge both an 18.5% collection fee (which I paid) and a 31.13% collection fee. Of course, they deny the second fee and say it was a mistake. But it was still in their system on my account as of two weeks ago. So, I'm suing for fraud, FCRA violations, defamation, and all sorts of stuff. Any comments?

 

Re: To Lizardking-student Loan

I have tried everything Roni. I would not be satisfied with Equifax's 120+ days past due notation. It might as well show outstanding balances past due on the loans. It is just as bad (almost) according to Fair Isaac. I won a couple of motions in Court but it is mostly procedural stuff. I'm drafting up summary judgement pleading even now and depositions are set for next month. It should be interesting and I think the judge is buying my story. Roni, do you think you would make a good witness?

You see, you really feel like a bad asterix when you write letters to Senators, the Attorney General, the General Accounting Office, FBI, etc. but it got me nowhere. Nothing happens till you take them into federal district court and by then, it doesn't really matter what your credit report says, because they take you offline and you get rejected for being a party to a lawsuit. So, you have to go all the way and win. There is no halfway.

 

Re: To Lizardking-student Loan

United States Federal District Court in Seattle. I'm going to make this stick.