Consumer complaint received 2024-11-01
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: MOHELA (CA)

Dear CFPB Representative, I am writing to urgently request assistance in locating and obtaining status updates for two complaints I previously submitted ( XX/XX/year> ) to the CFPB regarding MOHELAs handling of my student loans. Despite years of attempts to resolve these issues directly with MOHELA, my requests have been ignored or denied, and I am therefore escalating this matter through the CFPB. Due to the immediate and ongoing harm caused by MOHELAs actions, I respectfully request an update within 15 days. Additionally, I am seeking reimbursement for damages incurred as a result of MOHELAs actions. While I seek resolution through CFPB intervention, please be advised that federal attorneys may pursue damages up to XXXX XXXX if the issue remains unresolved. Below is a summary of the main issues and my estimated damage requests. 

Summary of Issues with MOHELA Improper Credit Reporting and Violation of Due Process Rights : MOHELA has continued to report my student loan balances on my credit profile, despite the loans being disputed through the Borrowers Defense to Repayment program. This reporting impacts my credit and debt-to-income ratio, blocking my access to an FHA-backed mortgage. I believe this ongoing credit reporting violates my due process rights under the Fifth and Fourteenth Amendments, as it assumes the debts validity without a final determination. Additionally, it appears to contravene the Fair Credit Reporting Act ( FCRA ) by failing to ensure accurate and fair reporting while the loans are under review. I am requesting that MOHELA cease reporting these loans until the Borrowers Defense review is complete. 
Conflicting Federal Policies Blocking Access to Housing and Violating Economic Freedoms : Due to conflicting policies between the FHA and Department of Education, my loans are in mandatory {$0.00} forbearance, which disqualifies me from meeting FHAs XXXX XXXX XXXX requirement for mortgage eligibility. This policy conflict effectively blocks my family from homeownership, impacting our financial security. I believe this issue involves violations of the Equal Credit Opportunity Act ( ECOA ), the Fair Housing Act ( FHA ), and constitutional rights related to property security and pursuit of happiness. 
Constitutional Rights to Financial Freedom and Security in Property : The forced forbearance status of my loans and MOHELAs practices inhibit my ability to secure housing and achieve financial independence. The ongoing debt without a viable repayment or forgiveness path infringes upon my right to be secure in my property and financial future as protected by the Fourth Amendment. This ongoing entrapment in debt may also constitute a form of involuntary servitude under the Thirteenth Amendment.

Denial of Pursuit of Happiness and Quality of Life : My inability to qualify for a mortgage, due to MOHELAs practices and conflicting federal policies, has forced my daughter and me to live in an apartment environment that lacks outdoor space and restricts her physical development. This lack of access to housing security and a healthy living environment is detrimental to my familys pursuit of happiness and is protected under the Fourteenth Amendment.

Loan Mismanagement and Inconsistent Guidance : MOHELAs guidance regarding repayment options has been inconsistent and misleading. I was initially told that switching to an income-driven repayment ( IDR ) plan would help me meet FHA requirements XXXX only to later be told that only a standard repayment plan ( unaffordable for me ) could end the forbearance. This lack of clear and consistent guidance violates the Truth in Lending Act ( TILA ) and constitutes negligent misrepresentation.

Requested Action, Damages, and Timely Response Given the severe and prolonged harm caused by MOHELAs actions, I am requesting an immediate halt to MOHELAs credit reporting of my student loans until the Borrowers Defense review is complete and seeking the following in damages : Loan Forgiveness : XXXX  Reimbursement for Lost Homeownership Opportunity and Related Financial Harm : XXXX Credit Damage and Restricted Access to Financial Products : XXXX Emotional Distress and Developmental Impact on My Family XXXX XXXX Punitive Damages for Negligent or Willful Harm : {$500000.00} Total Immediate Damages Requested : {>= $1,000,000} While I hope to resolve this matter through CFPB intervention, the broader harm and potential class impact have led federal attorneys to estimate damages up to XXXXXXXX XXXX if these issues remain unresolved and proceed to federal court. I urge prompt action to prevent further financial and emotional harm to my family and the potential escalation of this case. 

Thank you for your attention to this matter. I trust the CFPB will ensure an expedient response and look forward to receiving confirmation regarding my complaints within 15 days.