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Tag: debt

Banks Poor Record Keeping Strikes Again

 

Debt collectors assisted by poor bank record keeping.

Debt collectors assisted by poor bank record keeping.

Banks Poor Record Keeping Strikes Again

Big Banks Face Investigation Into Whether They Helped Debt Collectors Pursue Faulty Judgments

The largest U.S. banks face a multi-state investigation into whether they helped debt collectors pursue faulty judgments against credit card customers, according to people familiar with the matter.
At issue is whether weak record-keeping by banks or a failure to pass accurate information to collection agencies harmed consumers.
The allegations against the banks echo those central to last year’s $25 billion federal-state mortgage settlement to resolve charges that the banks “robo-signed” documents and pursued foreclosures with faulty information.
This latest probe targets the same banks, including Bank of America, JPMorgan Chase, Citigroup and Wells Fargo, said the sources who spoke on condition of anonymity because the investigations are continuing.
As with the mortgage cases, the investigation focuses on the banks’ poor paperwork and their weak tracking of the debts.

Big Banks Face Investigation Into Whether They Helped Debt Collectors Pursue Faulty Judgments

The banks poor record keeping or phrasing it differently, a reckless indifference to the property rights of mortgage holders, is in the news again.  The banks originally used their record keeping to facilitate seizing properties they lacked proper title to. But that wasn’t the only damage being done. It would appear they sold to debt collectors, debts owed to them by the mortgage holders dependent on the very same records they misused for years. You would think they would have noticed there would be a problem but no, people don’t like to think about their mistakes and crimes. So, we have former bank clients who owe no money being hounded by debt collectors.

Has anything been done to discourage these practices? It seems the profit never ends and no one is penalized? Does that mean that the banks can preserve for use over the next decades? Are these going to become standard bank practices?

These practices of banks poor record keeping and lying affidavits are illegal but with scarcely any penalty imposed they are undeniably profitable.

Aren’t these what Milton Friedman referred to as the “rules of the game,” and if you play by those, isn’t everything okay, you know – free choice, freedom to choose?

I suppose the feds will follow the usual practice of fining the banks a pittance and then allowing them to choose who should receive monetary relief if anyone at all.

This may not discourage the banks from continuing these kinds of acts. Shouldn’t the practice of banks poor record keeping put up a red flag for some regulator?

James Pilant

From around the web.

From the web site, Living Lies.

http://livinglies.wordpress.com/2012/12/20/if-the-bank-filed-foreclosure-ppapers-thats-good-enough-for-me-judge-alan-schwartz-dade-countyz/

From the comments by Matthew Bavaro

So, the bank rested and I got an opportunity to cross examine the witness, or so I thought. I was barely allowed to even ask a question. He shot me down almost every time I asked something. When I went to put my position on the record, he would not allow me to open my mouth. Well, I am not a wall flower, I am going to stand up for my clients.

 The acceleration notice that Bank of America sent was invalid in my opinion and about a dozen other judges around the state have found in favor of the homeowner on this very issue with the same acceleration letter from Bank of America. When I raised this to him, he could not believe that I had the audacity to actually ask him to rule in favor of my client. He implied that he is not going to allow a homeowner to stay in their homes without paying their mortgage even if the bank screwed up. When I asked to read the appellate opinions into the record regarding the paragraph 22 defense, his response was basically that he did not care about the letter they sent and the fact that they filed a foreclosure action alone is good enough for him.

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Prosecutors Enabling Debt Collector Misconduct

Adam Levin: The Alarming Ties Between Debt Collectors and District Attorneys

Consider what’s happening here. The debt collection companies are using the letterhead of the prosecutor’s office to threaten consumers with criminal prosecution and possible jail time. In reality, they’re in no position to back that threat up — but from reading the letter, the consumer has no way to know that. The truth is that in the vast majority of cases, the prosecutor’s office has no idea when these letters are mailed or who is receiving them, and has conducted no investigation to determine whether the claim of unpaid debt is actually true. Thus, the debt collectors are apparently mailing official letters without effective oversight — and often without even having the evidence they would need to prove that the recipients actually owe the alleged debts. In short, no case.

“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” Noach Dear, a civil court judge in Brooklyn who sees up to 100 such cases a day, told the New York Times.

This is, indeed, outrageous. To have prosecuting attorneys renting out their letterhead to private companies at all diminishes their office and, at the end of the day, betrays the public trust. To do this without weighing the merits of each individual case betrays the fundamental American ideal of due process and turns the phrase “innocent until proven guilty” on its head. Finally, to allow private companies to use the power and prestige of public office to coerce consumers, using the fear of criminal charges and imprisonment to bully them into compliance — well, that is so clearly abusive that it’s hard to imagine how anyone could defend it (not that they haven’t tried).

Adam Levin: The Alarming Ties Between Debt Collectors and District Attorneys

Debt collectors have a terrible reputation in this country for misconduct and often direct law breaking. For prosecutors to form an alliance with them, loaning them some of the powers of the state, is simply unconscionable.

I’m not the only one that thinks so – here’s J.F. Quackenbush from the web site, Disinformation:

So here’s the deal, it’s a crime to write a bad check if you know that the bank isn’t going to honor the instrument. But in most states, in order to be convicted the State has to prove that you knew the check was going to bounce when you wrote it. That’s hard which is as it should be, because the crime here is not owing a debt, it’s fraud. We don’t do debtors prisons anymore, and for good reason. Bankruptcy law is explicitly mandated by the Constitution because it has long been understood that not all debts are equal, and sometimes it’s for the best in our society if we just let people off the hook and give them a clean financial slate to start over.

This, of course, drives the vampires of the collection industry, who make money by buying debts for pennies on the dollar and then brutalizing the people who owe those debts who can’t afford to pay them, and in the meantime making all manner of threats and coercive promises to keep those debtors out of bankruptcy so that the vampires can continue to feed.

And here are some more thoughts on the subject from Caveot Emptor, Seeking Justice for Consumers

Prosecutors’ job is to enforce the law. One important part of that job is exercising some discretion over who to prosecute. That’s especially important in bad check cases. People bounce checks all the time, usually unintentionally. That doesn’t make them crimes. So a prosecutor’s job is to sort out the crimes from the accidents. Under the new arrangement, everybody gets contacted by a debt collector, which then demands even more money for a budgeting class — the profit from which goes into the collector’s pocket.

Here are some thoughts from Naked Capitalism

The excuse for this program is that district attorneys’ offices were overwhelmed with merchant requests to go after bounced checks where they were unable to collect the debt and alleged fraud. Um, what about saying “no” unless the amount at issue was significant, say at least a few hundred dollars, or having the merchant provide evidence of intent? Instead, this scheme allows the debt collectors to get a windfall from people who’ve stuffed up on relatively small checks (the two examples in the article were each under $100) as well as contributing to erosion of public faith in the legal system.

Consumer attorneys did succeed in getting one debt collector that engaged in this practice, American Corrective Counseling Services, to file for Chapter 11 in the face of class action suits. But its successor CorrectiveSolutions carries on with the same dubious practices and has “partnerships” with more than 140 district attorneys’ offices.

And here is a comment from Tech Dirt
The DAs office, it appears, is literally selling the use of their stationary. In exchange for letting debt collectors appear both a lot more official and for falsely suggesting that law enforcement is pursuing criminal action, the debt collectors “sell” a “financial accountability” class, from which some of the proceeds get kicked back to the DAs’ offices.
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Student Loan Debt a Lifetime Burden for Middle Class but Major Money Maker for Goldman Sachs

Kids today still screwed – Student Loan Debt – Salon.com

Just in case anyone decided to “scam” themselves some free higher education by going to college and then declaring bankruptcy, Congress decided in 1998 to make sure that student loan debt had no statute of limitations and could not be discharged except in the event of extreme (and effectively unprovable) hardship. Then tuition began skyrocketing, players like Goldman Sachs got into the student lending business, and middle-class job opportunities for people without college degrees disappeared. The result, naturally, has been extremely profitable for certain people (Lally Weymouth) and basically awful for everyone else in America. Now, Eric Pianin is in Lally Weymouth’s Washington Post saying that student loan debt might be “the next debt bomb.

Kids today still screwed – Student Loan Debt – Salon.com

Student Loan Debt a Lifetime Burden

My poor students are getting battered by an economy where there are few jobs in a nation where last year’s college graduates owed an average of $24,000 in student loans.

Other nations do not place the burden of higher education on the students. It is a matter of public expenditure. The United States has long been the leader in college graduates worldwide and no we are fourth. I see no prospect of that getting better but only worse. Education is not a commodity. It is a public good necessary for a successful society. For almost all students, the debts accumulated in college will last their entire lifetimes, making it difficult to buy homes, cars, etc. One of the great tragedies will be the necessity of working at a job that enables regular payments. The broad opportunities offered to previous generations are now limited to those that pay enough, and if you don’t get one of those, no matter how hard you work, you will never get even.

We can do better than this. We are a better people than this.

James Pilant

 

 

 

 

 

 

Bachmann Criticizes Obama’s Student Loan Plan – From the Wires – Salon.com

Obama is changing the rules governing student loans to make them easier to pay. Bachman does not like it.

Like her right-wing brethren, Bachman has a fetish for a thing called “personal responsibility.” I put it in quotes because what she means by the phrase is different than an actual English interpretation of it. Let’s quote from the article:

“There is a morality in keeping our financial promises, and I don’t think we should push that off onto the taxpayer,” she said. “The individual needs to repay and be responsible for repaying their student loan debt.”

 Bachmann Criticizes Obama’s Student Loan Plan – From the Wires – Salon.com

In English, personal responsibility means that individuals have a responsibility for their obligations. But Bachman only means the little people, those individuals with mortgages, student loans and credit card debts. She is merciless in her desire to have every last dime extracted from these individuals.

But she is less enthusiastic about investment banks, American corporations’ overseas operations, or any legal accountability for the economic catastrophe of the Wall Street Crash of 2007 and it subsequent bailout (at a 100% of the value of the toxic assets). How long could I go on about the incredible lack of responsibility by much of our corporate and ruling class?

So, personal responsibility is only applicable to certain people.

Let me make a guess as to how the little people, those with personal responsibility, as opposed to those without are divided. It’s purely driven by the size of their campaign contributions and the number of lobbyists they field.

It is not surprising that Bachman is unable to manage any criticism of a student loan system that among other problems happily pays out money for valueless degrees by unaccredited institutions. It is not surprising that imposing twenty and thirty years of debt on America’s young is not a problem in her eyes. It is not surprising that the pain of ten of millions of Americans who live day to day one step above financial insolvency while American* corporations horde their money and enjoy record profits does not strike her as a serious problem.

James Pilant

*I sometimes wonder just how American they are. Corporate fidelity to the moral standards of a patriot seem questionable at best. Many business thinkers deny that corporation have any responsibility toward the nations whose laws and military protect them.

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The Biggest Middle Class Tax Increase In History Will Come In Five Months (via 1 Nation Blog)

Best comment from the post –

Is our government functioning properly?

Absolutely not! We may have just made the same (similar) mistakes that were made in 1937. I think all of Washington has folded on their responsibilities.

The attached essay explains better than I could the nature of the tax increase about to hit almost all of us in a few months.

James Pilant

The Biggest Middle Class Tax Increase In History Will Come In Five Months | Aug. 2, 2011, 12:33 PM | Image: ChuckHolton via Flikr Bruce Krasting URL Bruce Krasting is a former hedge fund manager There is one aspect of the final debt deal from DC that took me by surprise. I was convinced the 2% reduction in payroll taxes would be extended through 2012. On July 12th I wrote about this and  got it completely wrong. Not only did I think there would be a one year extension of the existing holiday; I forecast that the subsid … Read More

via 1 Nation Blog

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Progressives Need to Politicize Money (via Gerry Canavan)

Progressives Need to Politicize Money (via Gerry Canavan)

Exactly.

One of the most important lessons of the economic meltdown in 2007 and the mortgage crisis that followed was how little bankers and mortgage companies had to fear from the law. It seemed at that time and still does, that there is no action so unprecedented and no cruelty inflicted on borrower or public that can arouse a federal prosecutor to action, while a minor drug charge calls down every weapons of the state from property seizure to fines and imprisonment. Two tiers of justice, two kinds of justice, is one too many.

James Pilant

From a series of legal codes favoring creditors, a two-tier justice system that ignore abuses in foreclosures and property law, a system of surveillance dedicated to maximum observation on spending, behavior and ultimate collection of those with debt and beyond, there’s been a wide refocusing of the mechanisms of our society towards the crucial obsession of oligarchs: wealth and income defense. Control over money itself is the last component of o … Read More

via Gerry Canavan

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Welcome To Pottersville, USA (via Crowhavenscriptsfarm’s Blog)

A few stories of the banking industry and how it plays the public for every last extractable fraction of a cent!

I’ll let the stories speak for themselves of the constant danger of being a consumer in America.

James Pilant

Welcome To Pottersville, USA Yes, that is a reference to that classic film, “It’s A Wonderful Life”. Oh where, oh where is George Bailey when you need him?! Because most banks, MOST not all, are run by Mr. Potter type thinkers. Get ’em while they ain’t lookin’. And get ’em good! We have debt, who doesn’t these days? I own up to it, or “own it” as the financial gurus tell you you must. I do, we have debt. And with two teens, more is coming. My hours at work have been cut in h … Read More

via Crowhavenscriptsfarm’s Blog

Student loans leave crushing debt burden (via MSNBC)

When will student loans reach such a size and ferocity in collection that a majority of American students no longer believe it is financially worthwhile to go to college?

Has the American dream simply disappeared for millions of Americans to whom a college education was the gateway to some form of economic security?

James Pilant

The cost of a college education is rising faster than the cost of medical care and as much as three times as fast as consumer prices in general. But that’s just the beginning of the price of admission.

This is the story of a debt crisis few are talking about.

Americans now owe more on their student loans than they do on their credit cards — a debt fast approaching $1 trillion with no end in sight.

Students borrow because they see little choice. A college education, after all, is a key to success. That, it seems, is an article of faith.

Read More

Opinion: The Looming Student Loan Crisis (via AOL News)

For many student loans are a continuing crisis in their lives. Is this kind of debt for millions of Americans sustainable? What are the social effects?

Does the student loan burden keep students away from running for public office, pursuing jobs valuable to society like police, fire and military?

Is this the way, we as a nation should finance our children’s education when that education is so critical to national success and competition?

Read this article and see what you think.

James Pilant

Like home ownership, a college degree used to be perceived as one of the keys to success. Unfortunately, these days it’s starting to look like a gateway to financial ruin.

The Federal Reserve has confirmed that as of June 2010, consumers now owe more on their student loans than on their credit cards.

A separate report reveals that one in five people can’t make their monthly payments.

As a result, Sallie Mae and Citibank have become the arch nemesis of millions, and the country as a whole faces what some warn is America’s next “mortgage meltdown.”

..Read More

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