Posted on 07/17/2017 4:46:53 PM PDT by Libloather
Tens of thousands of people who took out private loans to pay for college but have not been able to keep up payments may get their debts wiped away because critical paperwork is missing.
The troubled loans, which total at least $5 billion, are at the center of a protracted legal dispute between the student borrowers and a group of creditors who have aggressively pursued them in court after they fell behind on payments.
Judges have already dismissed dozens of lawsuits against former students, essentially wiping out their debt, because documents proving who owns the loans are missing. A review of court records by The New York Times shows that many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation.
(Excerpt) Read more at msn.com ...
I used to work in the student loan industry. My employer would purchase large volumes of student loan portfolios from banks, and we would get scores of banker boxes with the original files of paperwork. The files themselves were microfilmed (later digitized) and shredded...but we pulled the original applications, repayment schedules, and most of all the original notes—anything with a “wet signature”—and stored them in a vault, as if they were stock certificates or Treasury bonds. Because, in the eyes of the law, they were literal money. And we periodically got calls for the original notes, most often for subrogation to the Department of Ed or for court purposes...there was a strict chain of assignment followed and recorded.
What probably happened here is that, as with the mortgage securitization debacle, the original paperwork was digitized en masse and shredded, with no “wet signature” docs retained. So now...there literally is no legal proof of ownership of the debt.
Yeah, I remember when many people thought their mortgages were going to be wiped away in the Bank of America debacle. They found the paperwork.
Bingo.
But you just know these “private” loans will be bailed out somehow by the taxpayers when these loan entities crash.
Sometimes I feel like a real chump always paying back any loans I get.
If I loan someone money for a living I am going to keep my paperwork in order.
Stupid doesn’t pay.
Whom exactly should you step up to and pay what you owe if no one can prove they own the note?
But where did the money end up? At the colleges. This whole thing was a farce to send billions to “higher education.” Can’t get congress to cough up more for socialist indoctrination at our colleges? No oroblem, Obama had the answer.
These aren’t government loans. These are private loans that have been sold probably a half dozen times and now the note has gone. I’d believe it. I haven’t had issues with student loans but I’d have mortgage firms do all kinds of crazy stuff.
Someone needs to do more than shrug this off as if it were an accident. If they don’t, next thing ya’ know everyone who worked in a democrat campaign will have their CC records vanish, their criminal records vanish, and etc.
There is a their there!
It’s posted there in #6
Just like Hillarys emails. Duh.
"Wiped clean, like with a cloth?"
Yes, if there was a valid assignment of the debt and required notice, the debt is collectable. But, there may be a statute of limitations problem if the lender just sat on its rights and did not actively try to collect.
... or all the Army’s service records get destroyed in a fire
“Many people have lost their homes due to confusion as to the actual owner of their debt.”
I bought my first home at age 26. I remember being VERY upset when my mortgage was suddenly ‘transferred’ to some Florida company that I had never heard of! That was in 1986.
The one and ONLY time it happened to me, thank goodness!
I’m just talking MORALS, here. You borrowed X-amount of dollars from SOMEONE at X-amount of interest and it was due on the 15th of the month until PAID, or in some sort of balloon payment at the end.
Are people that DAFT to think they don’t need to repay that money?
I guess so! Nice deal if you can get it!
Convenient
Yes. Because now, being expected to repay one’s debt is “RACIST”.
Stealing is one of those 10 God gave to Moses!! When they rot in life we’ll probably pick up that tab too.
Many are very sick with a disease of self and that kills society.
Only could an entity like the US government eff something like this up. No private institution would “lose” borrowers’ information like that.
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