Credit Card Default- No Standing, No Ability To Collect!!!!!!!

Mortgages that were securitized can't be legally foreclosed on, because of standing. How about Credit Cards?

Just like with mortgages, because banks have sold off the credit card debt, they've shifted some of the risk off their books. But does that void or alter a credit card companies right to collect?

Under the Fair Debt Collection Practices Act – the current creditor must be identified – but no one ever does that – they falsely name the original creditor. Credit card debt was securitized too. You know where the word securitization comes from? – “securities” – it is the process of converting current receivables into securities. Have said many times securities must be derived from assets that are current – liquid – easily converted to cash. See Securities and Exchange Commission – Regulation AB.

Critics say that securization has allowed banks to go out and make too many loans to too many people. And the result is what we have today - more people defaulting on their credit cards and delinquencies rising as well. But the banks don't lose money if they have already securized and/or insured the debt.

I thought I would throw this out there. If we could effectively shut down the credit creation fraud in this country, we could rebuild.

reply to post by lostviking


The fact is, no one at these large banks has the time or knowledge to properly complete a chain of ownership affidavit for the card debts that have been securitized. If you know how to show that they sold off the debt, you can win a case against them. Heck, you could go on the offensive and sue them first for a FCRA violation. Make them prove you owe them money. When they can't, they darn well better the bureaus, else bigger damages are coming

Those $700 attorneys know how to bundle and package, but they never thought that anyone would DARE question their brilliance when it came to these trusts. Record keeping on an individual account level? Heh. Why would they bother with that? They will just shove those little people through the collection agency meat grinder

The arrogance that exists at the big banks is shocking. If you understand how to use that to your advantage, you can beat them.


Another defense would be to show that, upon repurchasing the debt from the trust, the original creditor took on a known risk, and that their damages are limited to what percentage of charged off accounts are historically recovered. In other words, the creditor knows that, of all charged off accounts, only (let's say) 22% of the money is ever recovered. With that knowledge, they assumed a known risk from the trust.

There is a simple way around this, and don't let any collection agent or business tell you otherwise...

When you don't pay a debt, or dispute the goods or services you received and as the consumer, refuse to pay, the original owner of the debt is the only one who can usually collect against you. In most cases, the original debtor sells the debt to a collection agency, promising them a percentage of the amount they can collect on their behalf.

You have the right, by law, to ask that the collection agency PROVE that you owe the amount they say you do, AND that the collection agency has a contract with YOUR SIGNATURE ON IT, that says that you are required to pay the collection agency and not the original debtor. Now, in some cases, they do have a contract that you signed with the original debtor that also states the collection agency used, so in those cases, you have to take further steps. But in most cases, you will win in court just based on this alone.

That is like me calling you because I know you at one point, owed Sears some money. I say to you "You owe Sears some money and I'm collecting on their behalf"... where is the proof? Would you pay me just because I said you owe? This is where MOST collection agencies fail miserably because the paper trail is too messy.

Not only that, but after a debtor sells your account to a collection agency, they usually destroy their records, so when the collection agency needs to get the original receipts and statements that prove you owe the amount they claim, they can't get the paperwork.

Hope this helps! I am pretty much debt free after dealing with these greedy asinine places, and it's definitely not easy.

~Namaste

reply to post by lostviking

I keep waiting for citi or chase or some other megalithic creditor to try to move these defaults into the criminal courts...charging fraud, theft, conversion of property, etc...

reply to post by lostviking


For example, if I loan you $100, but then transfer my interest in that debt to another party, I have no standing to sue. It's as simple as that.

If I buy back the debt after it has defaulted, I have assumed a known risk, and my claim is greatly or completely diminished.

Lenders who buy back card debt, even if it can be proven they repurchased it, are just junk debt buyers. Some states have statutes that deal with JDB's in a much harsher fashion than other debt collectors. I believe it is reasonable to argue that the original lender, having repurchased a known default, should be treated as a junk debt buyer. No matter, the repurchaser is subject to the FDCPA before and after repurchase, since they immediately sold and then (allegedly) repurchased the debt.

reply to post by SonOfTheLawOfOne

What I am wondering also, is how can the 'pretend creditor' report negative information to the credit bureaus if they aren't the true lender? Any idea?

Originally posted by lostviking
reply to post by lostviking

 

The fact is, no one at these large banks has the time or knowledge to properly complete a chain of ownership affidavit for the card debts that have been securitized. If you know how to show that they sold off the debt, you can win a case against them. Heck, you could go on the offensive and sue them first for a FCRA violation. Make them prove you owe them money. When they can't, they darn well better the bureaus, else bigger damages are coming

.

How would people show that they sold off the debt?
There's also the other point that they raise 40 times the given amount of credit with each application. Surely, that should also somehow have a bearing on how much the card holder should repay?

reply to post by lostviking

I believe, as consumers, we need to revolt against the fraud that has been committed by our signature. I am not late on any payments, but I believe that the way the credit card issuers are raising interest rates on people (even when they are not late), and rescinding credit limits that something needs to be done. The credit card company is paid in full when they sell the debt into securitized pools, so the CC company is basically services the loan. Much like a mortgage.

I never even checked my credit score. It's non existant to me. If it's really bad, who cares? I don't.

If I cannot afford something, I don't get it. Loans are just the lure sharks use to trap you and eat you anyway.

If a human being loans me 25$, I pay them back. Often times with a few extra bucks (like 5 or 10% extra) as a friendly gesture to build personal credit between me and the awesome person who helped me out.

I see a moral imperative to repay human beings.

But bank robber barons (criminals) who just make money out of thin air, well, I don't see any moral reason to treat them fairly at all. It seems the ethical response is to cause them as much trouble as possible to punish them for their malpractices.

reply to post by lostviking


Legally, they can't.

They do so without repercussion usually, but you can also sue the collection agencies for this, and it's $1000 to you for every violation that they don't remove, but you have to follow process. You can also sue the credit reporting agencies if they don't comply as well.

If there is a collection agency that lists on your credit, and you ask them to verify the debt, they have 30 days to do so. If they don't, you are allowed by law to follow up with a request that they remove all negative items from your credit. They have 30 days to do this as well. If they do not, you have to remind them one more time, legally, and they have 15 more days. If they do not comply at this point, you can sue them in court and get $1000 for each item on each credit report. Once you have all of your letters and return receipts, you send them to the credit reporting agencies and they MUST remove the items, otherwise, you can take them to court and will likely win.

If you have to go this route, you MUST send certified letters with return receipts by mail so you can prove that they received the letters in court. That is your primary defense. They do not have the right to report on your credit without proving that they are legally able to collect on the original debt. You'll spend some time and money writing the letters and keeping track of things but will ultimately win.

Because they don't follow the law, I have been able to remove over $7K in disputed debts and loans from my credit. If you are a business and aren't going to follow the law, I certainly am not going to pay you. These places are required to do things by the book, and when they don't, what channels are you allowed to dispute them? What can you do when they jack your interest rate for no reason? NOTHING... you stop paying, because you dispute the terms of their services, and you wait until a year or two passes to get it removed from your credit reports.

Once you have gotten rid of the collection agency account, which happens because of lack of proof on their part, you get the original debt removed for the same reason. After 1-2 years, most companies destroy their records.

We should have more rights, and since they use the system to screw us, there are smarter people who have learned to fight back. For now, this is your best weapon against the credit machine.

~Namaste

reply to post by SonOfTheLawOfOne


Would you provide more information how you got rid of your debt? I believe you have a strong argument for erasing credit card debt. How about the credit bureaus?

I know a man who got a collection letter
from a 3rd party who was collecting on
a credit card balance. The new 3rd party
could NOT name the original lender the
collection was based on.

reply to post by lostviking


Many of these loans are patently fraudulent.

They use coercion and sleight of hand to trick people into signing the loan.

Then, they pull out 100 pages of dense legal jargon that somehow says you owe them twice or three times whatever you "thought" you agreed to paying.

Only like 5% of the population is willing to read a few dozen pages of dense legal jargon, and only a small fraction of them are even capable of understanding what it means.

Since the Education system is set up to IGNORE these facts of life, and does not teach children how to read legal jargon and understand it in context of credit, banking, commerce, etc; it only follows that this is a highly fraudulent and deceptive practice.

For example, although somewhat abstract:
They say that signing a voter registration card applies you for all kinds of other things. For example, putting you in a jury duty pool.

However, when I signed a voter registration card 10 years ago *I won't ever sign that thing again*, it was a small piece of paper with NO legal print on it at all. There were no lists of stipulations, HOWEVER those stipulations are "implied* and they *expect* you already know about them.

This is fraud, it's deception.

You sign something thinking X, but in reality Y and Z will come after you right away.

It's complete and total fraud.

You cannot use deceptive practices to fool people into signing a contract that ruins them. Those contracts are invalid purely on the premise that they are promoted through deceptive practices.

reply to post by SonOfTheLawOfOne

Great post SOTLOO! How about having the original debt removed from your credit report because they are no longer the lender because they sold off your debt into a securitized pool?

reply to post by lostviking


Your whole premise depends in large part upom whether the assignment of the debt was "with recourse" or "without recourse.

And a lot of people are misreading the original court decision regarding securitized mortgages. It is not that they absulutly can never be collected. It is that the party sueing must prove their ownership of the underlying debt obligation. It is not the mortgage that is "securitized. It is the note underlying the mortgage. The banks were trying to get around this by having "robo-signers" sign affidavits saying, in effect, "I have looked at all of the original documents (notes, mortgages, assignments, cross-collateralization agreements, non-atornment statements, etc.) and bank X owns this note and related mortgage." In fact, these affiants had never looked at the first piece of paper. The biggest import of the case is that the court put the burden of proving standing on the bank instead of the normal case of lack of standing being an affirmative defense which had to be proven by the debtor.

reply to post by lostviking


See page 11 for how to prove that the credit card company doesn't have standing to force payment.

Defend Credit Card Case

reply to post by 4nsicphd

The mortgages were void because the note and mortgage were separated when the loan was securitized. With credit cards, I would believe that the creditor would need to demonstrate that they actually loaned the money from their balance sheet, and never sold off the loan.

reply to post by lostviking


A transfer of debt ownership reduces or eliminates standing to sue for collection of the debt.
Repurchasing or purchasing the debt is a known and assumed risk taken on by the purchaser. their standing is diminished or eliminated by the repurchase, since they are fully aware of the diminished value of charged off accounts.

"They" doesn't really matter. Ownership of the debt has changed hands. That is in the SEC filing. Unless and until the lender can prove repurchase, they have no standing to sue. They also have little or no standing to sue on an empty shell account. They suffered little or no loss on the shell account.

I suppose the creditor could attempt to repurchase the debt. However, how can the lender prove repurchase? With an affidavit? Does it break down the repurchase into individual account numbers that are tied directly the the legal name of the account holder? Not a chance. Absent that, they have no proof of ownerhip that ties them to the debt. The SEC filing shows it left their hands, and they can't prove they got it back.

Just wait until we have precedent showing that the original creditor, upon repurchase, falls under the FDCPA or similar state legislation

It will happen. Give it time.

My opinion is that the card issuers just want everything related to the past few years to just go away That is why they are settling for next to nothing.

This morning, I saw a person's bank card account letter that offered to settle for 26%.

I have a question. I had a chapter 7 BK in 2009 and turned in a vehicle that was under a LLC. The negative equity on that was around $12k. I was on the loan as well. They had one collection agency send a letter about a year ago. I never responded and recently they had another agency contact me regarding this. I am in the process of dissolving that LLC and operating under a new structure. When I did the BK, I did not file for the business. So, what are my options at this point?