loan payments after termination - loan policy does not allow it

[WCC]

The loan policy states that loan payments must be withheld via payroll and upon termination the loan balance is due or it defaults.

Scenario:

Participant terminates with an outstanding loan and sends personal checks for loan payments to the record keeper. The record keeper accepts them and does not default the loan. The plan sponsor realizes that this is happening six months later. What is the proper correction method?

My thought is that this is an operational failure similar to the inclusion of an ineligible employee who is allowed to defer. In that scenario, either the plan is amended retroactively (411d6 issues may apply) or the ineligible deferrals are returned to the employee. Is it a stretch to apply the same logic in this loan scenario?

It seems there are two options:

1. Stop accepting payments and default the loan during 2013

2. Return the loan payments and default the loan based on the outstanding balance at the time of termination (6 months ago)

Any thougths?

Thank you