Billions of dollars' worth of predatory student loans may... just... vanish


#1

Originally published at: http://boingboing.net/2017/07/18/subprime-student-loans.html


#2

One thing I noticed here is that it only came to light that the purported owner of the debt couldn’t produce the note after the borrower had defaulted and gone into some sort of legal proceeding.

If you’re paying a loan, and you’re current, can you just request that the servicer produce the note to prove ownership? Is that what’s coming next?

Related question: If the note can’t be produced at the time of the court hearing, and then it’s “discovered” later can the debt be enforced or does the judge extinguish it going forward?


#3

Remember that during the RE bust, the banks were caught PAYING TO HAVE DOCUMENTS FORGED and submitting them to the courts, and the result was that they had to pinky swear that that they wouldn’t do that anymore and the foreclosures kept on going. So I suspect that this will not slow down the collection of student loan debt much…


#4

Hm, this BB post isn’t quite what i was hoping for. I have some student loans i’ve been slowly paying on but i still have a long road ahead to pay it off :frowning:


#5

Exactly what I came here to say. These bottom-feeders are, amazingly, less reputable in their business practises than the big mortgage lenders are. Before they have to take a haircut on their already thin margins, it’s inevitable that these collection agency scumbags will engage in fraud and forgery in addition to their usual intimidation tactics.

The good news, so far as it goes, is that a lot of this debt went toward tuition for the for-profit “schools” that worked the marketing end of this scam. If anyone should be punished, I’d prefer it’s one of the confederates than the marks.


#6

National Collegiate, My son has had nothing but nightmarish BS with that company since his graduation, good riddance to bad rubbish.


#7

The worst part of paying off student loan debt is all the articles you’ll see promoted on social media about how someone managed to pay off their debt in less than five years and you look into the details to find out that they were gifted a house as a wedding present that they sold off or rented and have a job at dad’s law firm, etc. Unless you have lucky windfalls and fortunate circumstances, it’s a long hard road.


#8

There’s something very fulfilling about cost-cutting of a likely few million dollars on basic record keeping losing these clowns several billion in the end.

They didn’t even do as well as Grayson Moorhead.


#9

No, no. Remember Bernie Sanders? We didn’t elect him President.

Remember Hillary Clinton? Yea, we didn’t elect her either.

We elected Donald Trump. What’s his position on education financing? Oh, that’s right. Low v. Trump University, LLC.


#10

A co-worker, married with two kids, told me that once he had kids, he gave up bothering to pay his student loans. He had some loan service wrap them up in a “welp, I defaulted” package and is focusing on saving money for his kids to go to college instead, and accepts that he’ll simply never pay off those loans.

Another friend, after being a ‘professional student’ for 15 years and earning their PhD from Oxford, has loans so massive that they got a job with the military specifically to defer their loans. As long as they’re employed with the gov’t, their loans don’t exist.

Student loans are a prison.


#11

I had a similar “no document” experience with my home mortgage a while back. We had enough equity to cease paying into escrow for insurance and property taxes and I requested my escrow back from the mortgage company. The informed me they were keeping $250 as a service fee for closing the escrow account. I balked and insisted they were not entitled to any such fee. They would not return it so I filed a complaint with the US Office of Currency Control - make note, this is who regulates mortgages. We entered into a managed complaint and I told the mortgage company that my review of the mortgage documents showed no basis for the fee, and that was what we agreed to when we took out the mortgage. I asked them to produce the documentation that we agreed to pay this fee. They mailed some copied pages that had nothing to do with escrow, as if we would not review it and capitulate. I skewered them and shared the bogus documentation with Currency Control and they ruled in our favor. We got our $250 back.

At that point our mortgage had been sold from lender to lender several times and it became clear that aside from the account the current holder had none of the original paperwork. I probably could have stiffed them for the whole thing at that point, but I would not feel right about that.


#12

Thanks for fighting. More people need to. But how many hours did you spend for that $250?

And that kind of attitude is exactly why corporations feel that they can screw us with impunity.


#13

I headed off to college in the early 1980s. Before I started a single class, I realized that the debt burden of a college loan would eventually ruin me financially. I immediately quit that line and joined the workforce instead.

On one hand, I really dodged a bullet: I was studying Journalism. On the other hand, I now spend my days teaching educated fools from uneducated schools how to write a coherent sentence. Always for significantly less pay than my peers.

If I lived in Candyland, I’d tell today’s kids to be responsible for the financial debts they take on. After all, it isn’t fair that they renege on their debts when I had to renege on a higher education.

Instead, I live in Trumpland. You know what to do, kids.


#14

Not many. An hour or two on a couple of letters. Some web-surfing to discover exactly who a bank had to answer to over mortgage disputes. I’m quite sure it cost me less actual money to prosecute this than it did the bank to defend it.

I remember this ended with a call from the bank, some minion that told me they would refund the money, not because I was right, but because they were being nice, and admitted no wrong doing. I suspect that if they did not settle before Currency Control made an official ruling against them they would be facing more serious federal penalties for bad behavior.


#15

Here’s hoping you and he can say good riddance to his loans too!


#16

Moral of the story, if you default on enough loans one day you to might be the potus.


#17

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