The Federal Reserve Board has approved a lawsuit that claims the Federal Housing Administration (FHFA) violated federal law by misrepresenting program terms. The plaintiffs claim that the agency is abusing the loan forgiveness program and providing false or misleading information to borrowers. In the meantime, the company has stopped issuing qualifying loans and is awaiting a ruling on the validity of its decision. The government is pursuing a settlement to resolve the issue, but in the meantime, borrowers can file a federal lawsuit to obtain the funds they need to make their monthly payments.
The Federal Trade Commission (FTC) is also investigating the matter.
It is unclear whether the agency is behind the lawsuit, but FedLoan has repeatedly denied the accusations. In addition to the lawsuit, the FTC is monitoring the situation to determine whether the FTC is being truthful and following the law. A successful case could help borrowers get the relief they need. If you are looking for a fast way to regain control of your finances, you can use an online tool to compare student loans and find the best interest rates.
Despite these concerns, the FTC has acted to correct the problem. While it has been a long time since FedLoan’s failure to provide accurate payment counts has prompted a lawsuit, it has not been able to fix its mistakes. It has also halted the payments of borrowers who dispute the counts. The result has been an increased total amount due to the lender. The FTC has determined that FedLoan is not only liable for the FTC’s actions but is also obligated to pay penalties.
In 2016, the Federal Trade Commission (FTC) began warning about issues with FedLoan Servicing.
The FTC, however, failed to take any action after the agencies issued their initial warnings. Despite the FTC’s warnings, FedLoan ignored them, and the complaints began to pile up. A spokesperson for the company said that they are prepared to discuss the issue with the Attorney General. In the meantime, the company is ready to defend itself against the lawsuit.
The federal lawsuit was filed by Massachusetts Attorney General, Susan Healey, in 2017 and is now a class-action lawsuit. In 2017, the Department of Education admitted that it had made several mistakes regarding its Public Service Loan Forgiveness program. She alleged that the company had a pattern of mishandling payments for the forgiveness program. In the end, she sought a settlement of the company. The case has been settled.
The Federal Trade Commission (FTC) has filed a federal lawsuit against FedLoan to resolve these problems.
The FTC claims that the agency misrepresented its qualified payments and undercounted the number of borrowers who are eligible for PSLF. The FTC believes that FedLoan should be forced to rectify its practices. It should be penalized for its practices and be forced to pay restitution to affected borrowers.
The FTC also ruled that the FSA undercounted the number of eligible payments a borrower was eligible to make. Because of this, the FTC imposed a rule that required borrowers to pay 120 full, on-time payments. Ultimately, this decision meant that FedLoan had not complied with the law, but had a duty to make the loans for their borrowers. There are now many pending cases against the federal government and it is important to find out which ones apply to you.
The FTC has found that FedLoan knowingly undercounted qualified payments for several consumers.
This has caused a massive backlash, as it has pushed up interest rates and negatively affected borrowers’ credit scores. Its legal challenge is the first in this case, and it is expected to continue to be defended for some time. If it does, the agency will not be able to change its practices, but it will still be held liable for the restitution and damages incurred by its customers.
In addition to being unable to honor the rules of the PSLF, FedLoan also miscounted its payments for its debt relief programs. Denying these individuals, halted the processing of their annual application for forgiveness. The agency then placed them into Forbearance, which essentially paused their required payments and increased their total debt. In addition to affecting their ability to receive the benefits of this program, the company allegedly violated federal laws.
