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Debt Buyers

FHA Won’t Reduce Your Mortgage, But it Will Sell it to Investors at a Steep Discount

A report by The Atlantic reveals that the Housing and Urban Development Department (HUD), has been selling large numbers of delinquent, FHA-insured mortgages. When a borrower can’t afford to pay her mortgage, the bank that owns the mortgage will make a claim on its FHA insurance. FHA pays the bank and in exchange, it becomes… Read More »FHA Won’t Reduce Your Mortgage, But it Will Sell it to Investors at a Steep Discount

Debt Buyers Seek to Escape Liability By Invoking Their Predecessors’ Forced Arbitration Clauses

Forced arbitration is a widespread problem for American consumers. Corporations bury complex terms in fine print, and then argue that consumers “agree” to arbitration in everyday contracts. But in general consumers have little understanding of what forced arbitration is or what rights they are “agreeing” to give up. Put simply, forced arbitration means: NO JUDGE, NO JURY, NO RIGHT OF APPEAL. Further, the arbitrator is not even required to follow the law. Forced arbitration has been called a “silver bullet” used to kill consumer lawsuits. It provides what Adam Levitin calls “bargain basement justice.”

Read More »Debt Buyers Seek to Escape Liability By Invoking Their Predecessors’ Forced Arbitration Clauses

Judge Upholds $82 Million Jury Verdict Against Portfolio Recovery Associates, Finding “Intentional Malice” and “Reprehensible…Use and Abuse of our Court System to Harm the Plaintiff”

In May, 2015 a Missouri trial jury awarded an $82.5 million verdict against Portfolio Recovery Associates, LLC (PRA). At the time, a spokesman for PRA said the verdict was “outlandish… defie[d] common sense” and that PRA “hope[d] and expecte[d]” the verdict would be set aside by the trial court. Then in September, 2015 PRA entered… Read More »Judge Upholds $82 Million Jury Verdict Against Portfolio Recovery Associates, Finding “Intentional Malice” and “Reprehensible…Use and Abuse of our Court System to Harm the Plaintiff”

Encore Capital: Growing Foreign Profits

A few years ago, Encore Capital, the parent of debt buyer Midland Funding, LLC started spreading money around overseas, mostly notably with the acquisition of Cabot, a debt-buyer in the United Kingdom. It’s most recent quarterly call with investors (transcript available here, signup required) paints an interesting picture of its ever-expanding global reach. The call… Read More »Encore Capital: Growing Foreign Profits

Portfolio Recovery Associates (“PRA”) Is Now a Global Debt Collector

Like Encore, debt-buyer Portfolio Recovery Associates recently held its quarterly call with investors (transcript available here, signup required). Like Encore, Portfolio emphasized its growth outside the United States, in Europe and South America. Portfolio appears to be some way behind Encore in this expansion, although it does have some very far flung outposts – as… Read More »Portfolio Recovery Associates (“PRA”) Is Now a Global Debt Collector

Junk Justice Update: Maryland Debt Buyer Filings in 2012-2013

In Junk Justice, I wrote about statistical outcomes of lawsuits filed by large debt buyers in Maryland. Based on my study, the years 2009-2011 had a combined total of over 121,000 cases filed by the sample group of large debt buyers in the District Court of Maryland. But now, the picture is different. We see a consolidation in the industry, and a drop in the number of filings.

Read More »Junk Justice Update: Maryland Debt Buyer Filings in 2012-2013

Defective Debt Buyer Affidavits and the Lack of Data Integrity: Other People’s Records (“OPR”) are Not “Business Records” of Midland Funding

Barry Stimpson, like so many other Americans, was sued by Midland Funding, LLC. Midland claimed that it had bought a debt Stimpson owed to Capital One. Midland tried to prove that Stimpson owned it money with three affidavits. The District Court of Canyon County, Idaho, found that these affidavits were insufficient. The court’s decision merits reading for its clear and full analysis of the law of evidence as applied to debt buyer affidavits.

Read More »Defective Debt Buyer Affidavits and the Lack of Data Integrity: Other People’s Records (“OPR”) are Not “Business Records” of Midland Funding

OCC Consent Orders With Bank of America, Wells Fargo, HSBC and Other Banks on Debt Collection, Foreclosure & Robosigning

In June 2015, the Office of the Comptroller of the Currency issued several consent orders dealing with misconduct by large banks. Two were new, against Bank of American and Wells Fargo for newly discovered misconduct. The remainder dealt with the failure by large banks, including Wells Fargo to abide by the terms of existing Consent… Read More »OCC Consent Orders With Bank of America, Wells Fargo, HSBC and Other Banks on Debt Collection, Foreclosure & Robosigning

Dispute Debt Collection? Consumers Trapped Into Paying Debts They Don’t Owe

Ashlee Kieler at Consumerist writes about the dilemma of being forced to pay a debt that is not owed:

Imagine receiving a phone call that 25% of your wages are going to be garnished because of a credit card account opened 14 years earlier that was never paid off. Making things worse, you know you didn’t have a credit card from the bank in question at that time, so it can’t possibly be your debt. This should be an easily remedied error, but not if a court has already granted a default judgment against you, making you responsible for paying back money that you didn’t owe and didn’t find out about until it was too late.

Read More »Dispute Debt Collection? Consumers Trapped Into Paying Debts They Don’t Owe

A Proposal to Ban Collecting on Time-Barred Debt

A new National Consumer Law Center (NCLC) report argues that the Consumer Financial Protection Bureau (CFPB) should use its power to ban the collection of statute-barred debts:

In light of the inherent unfairness, deceptiveness and abusiveness that occur when collectors pursue time-barred debt and the inability of disclosures to adequately protect consumers, the CFPB should ban all efforts to collect out-of-statute debt—whether by litigation or other means.

Read More »A Proposal to Ban Collecting on Time-Barred Debt