Friday, June 28, 2013

Consumer debt reduction led by mortgage write offs!

This is what I'm talking about...Mortgage debt, credit card debt and student debt only reduce because of discharges.

However discharges don't disappear, they end up with debt collectors who get court judgements, so these press releases about consumer debt being reduced are basically misleading the public.

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Tuesday, June 25, 2013

How Debt Collectors could improve their public image.

Debt Collectors are in a strange profession. A Debt Collectors job is to suck whatever cash blood remains out of the barely breathing money strapped victim while delusionally believing they are the do gooder superhero keeping society safe from blood sucking opportunists. The Debt Collection disconnect between how they perceive themselves and how others see them results in stasis.

I think Debt Collectors would probably prefer less overall antagonism both from those who hire them to collect credit card debts and the debtors they call to try and collect debts from.

The solution for a "kinder, gentler" debt collection industry stems from how they view credit card defaulters. Apparently in many if not all instances; credit card companies, debt collectors and judges do not make a distinction between different types of defaults. Deciding "Whether a credit card default has occurred, or not" is how most judges see their role. Unfortunately, this credit card default or no credit card default meme creates a self perpetuating stream of "rubber stamping justice".

The problem is that courts treat an "involuntary" credit card debt defaulter who lets say previously had a perfect payment history but perhaps lost their home in a fire and their place of work to outsourcing; no differently than a strategic default credit card debtor who ran up a huge credit card debt quickly and irresponsibly. 
If the courts make no distinction between an involuntary credit card default and a strategic credit card default, why should the credit card companies or debt collection companies do differently? 
And this brings us back to involuntary credit card defaulters versus strategic credit card debt defaulters. Judges apparently DO NOT  differentiate between who CAN afford to pay off a credit card debt, or at least keep making payments, versus someone who involuntarily has credit card defaulted because of a circumstance beyond their control.
As a society we should ask ourselves...Is it really ok to treat a credit card defaulter who previously had an excellent payment history but has a life changing event occur beyond their control the same as a credit card defaulter who strategically defaults?
I think most people would say that someone who purposely or strategically credit card defaults has committed a more egregious act than someone who has a life changing event occur beyond their control and basically needs a time out before they can pay off or begin paying down their credit card debt.

Apparently the judges, credit card companies and debt collectors  don't see it that way. 

However, were debt collection agencies to simply agree to give involuntary credit card defaulters more latitude, and focus their courtroom resources on strategic defaulters instead, Debt Collection companies would instantly gain the gratitude of most of the credit card defaulters that they presently hound on a regular basis.

Perhaps debt collection agencies don't want the courts to give more latitude to involuntary defaulters and less latitude to strategic defaulters because it might create a huge migration of competition into the debt collection field.
Or, is Debt Suspension Rights the first to think of the idea of splitting the difference when it comes to credit card defaults, and treating involuntary credit card defaulters differently from strategic credit card defaulters?
Just how differently would judges treat an involuntary credit card defaulter versus a strategic credit card debt defaulter? Not that much really. Both involuntary and strategic defaulters would still have to pay their debt, however the involuntary defaulter could simply be given better repayment terms. 

How about involuntary credit card defaulters have their debt frozen at the amount it was at the time the last  transaction was made on the credit card, with no more interest rates, penalties or fees accruing. 

Also, the credit card default could be scored neutral on a person's credit score. Once payments, even payments well below the minimum are regularly made, it would actually slightly help the involuntary defaulter's credit score. 

Just the slight change of distinguishing between involuntary credit card defaults and strategic defaults would have a profoundly positive affect, not just on the involuntary credit card defaulter, but to the general economy as well.

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Thursday, June 20, 2013

Supreme Court, June 20, 2013 ruling does small business owners a favor by denying their right to file a class action lawsuit.

(For a provocative article on Judges, Lawyers and involuntary credit card defaults, please click here.)  To like Debt Suspension Rights for Consumers, where are they?, on facebook, please click here.

I think the Supreme Court's American Express vs Italian Colors ruling that forces small business owners to accept arbitration (as written in american express's credit card adhesion contract language), rather than having the right to file a class action lawsuit, makes a lot of sense.

The internet in many instances has become a place where people complain. People may also gather as groups to complain, but less often do they have viable solutions. 

This ruling forces small business owners to be pro active and interactive with other small businesses. Whenever a concrete issue comes up that requires a lawsuit, ONE small business would be chosen for the test case, but many others would have to financially support the lawsuit.

If that ONE small business wins their case, then all the other small business owners would gain standing were they to file a lawsuit on the same grounds. If the supreme court had ruled in favor of Italian Colors, then it would have kept the power with the class action lawsuit attorneys. The supreme court's ruling now makes it an urgent matter that small businesses be organized ahead of time, before they seek out an attorney.

In a time of media induced forced bi-partisanship in which moderates have been ignored and forced to become either a progressive liberal or a neo conservative, this supreme court ruling requires small business owners to find a way to be in contact with each other in an ongoing basis, which could turn out to actually be a good thing.

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Monday, June 17, 2013

ProPublica article about Bank of America lying to its homeowners and rewarding employees for foreclosures strikes a HUGE NERVE in the comments section.

Propublica comments are now at 76, 102, 125, 151 regarding Bank of American lying to its homeowners about mortgage modification programs while also monthly bonusing their employees for foreclosing on homeowners. 

Most comments describe a similar level of B of A bull, along with complaints about Chase Bank and Citibank as well. All describe the same type of abuse. Please click on this link and read the about the torment our own government has put its own people through regarding home mortgage modifications.  

And lets hope that the consumer financial protection bureau might be able to provide additional remedy above and beyond the meager foreclosure fraud settlement that was reached last year and has barely tinkled down to those homeowners who have already lost so much.

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Thursday, June 13, 2013

AAG Reverse Mortgage Commercial uses former Presidential Candidate Fred Thompson and an American Veteran to tout Reverse Mortgages.

If reverse mortgages allowed seniors to take out a set amount every month (aka a monthly draw) in exchange for no mortgage insurance, and if reverse mortgages did not force the name of everybody but one person off of the deed (including other family members), I would say it was a solid program.

Unfortunately, Reverse Mortgages don't offer a set monthly draw option in exchange for no mortgage insurance, and reverse mortgages do force everyone's name off of the deed, but one. Imagine being the widow or widower and the reverse mortgage was in the name of the recently deceased, not a good thing, that is for sure.

It's a shame we can't do something truly honorable for our vets and our seniors and offer a reverse mortgage program that in exchange for an agreed upon monthly draw has no mortgage insurance premium and does not force others off of the deed.

Instead, we have companies hiring former presidential candidates such as Fred Thompson and retired World War II veteran Vincent Speranza to promote reverse mortgage programs as they presently stand. 

We CAN do BETTER for our veterans and our seniors than what this AAG Reverse Mortgage commercial is presently enticing viewers to do, which is pay that ridiculous mortgage insurance fee AND take a spouses name off of the deed. (scan over blank space below to see commercial)

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Monday, June 10, 2013

Why can't alleged Credit Card Defaulters plead voluntary or involuntary default in front of a judge?

The term defaulting basically means missing a payment or being unable to make the monthly minimum payments for an extended period of time.

Alleged credit card defaulters should be allowed to plead voluntary default, involuntary default, or innocent when it comes to credit card default court cases.  

If a credit card default was involuntary, and the credit card defaulter proves to the judge that the default was involuntary, many good things would instantly happen, and not just for the debtor, but for the debt collector as well.

Our judges would finally have some latitude to do more than simply rubber stamp the alleged credit card debtor as a defaulter. Involuntarily defaulting on a credit card means the debtor had a legitimate life circumstance beyond their control occur that the judge could view as a plausible reason for involuntarily defaulting. 

Credit Card companies have held a 15 year monopoly (or longer) on credit card debt suspension insurance that resulted in such severe overpricing of their credit card debt suspension insurance product. Most sensible people saw credit card debt suspension insurance for the monumental rip-off that it was. 

However, the damage was done either way. Either the consumer agreed to be ripped off above and beyond what was reasonable and pay the severely overpriced credit card debt suspension insurance monthly premium, or they went without credit card debt suspension insurance and if a situation caused them to involuntarily default, they were then rubber stamped into default status by judges who have had their hands tied for the past decade and a half, or longer when it comes to how they rule.

Once evidence is entered by the alleged credit card defaulter that results in an involuntary credit card default verdict, the judge would then have the leeway to basically freeze the credit card debt at the amount it was when the last payment was made (plus any final purchases), while also freezing interest rate charges, penalties and fees going forward.

Even debt collection companies could benefit from discerning between voluntary and involuntary credit card defaults. Instead of viewing every credit card defaulter as being the same, debt collection agencies could now actually use all of those relatively worthless repeat calls to instead verify who is involuntarily defaulting, and  who is voluntarily defaulting. 

This would streamline debt collection  litigating costs and allow them to focus more time on those who truly want to rip off the credit card companies, aka the voluntary credit card defaulters. Collection agencies could actually decide that if a debtor defaulted involuntarily, they could simply get a promissory debt instrument from the defaulter with repayment terms without ever going to court.

In turn, Involuntary defaults could be considered credit score neutral and even turn into a benefit if over time the frozen amount owed was being paid down. Whereas right now, making a payment on a defaulted credit card account actually adversely affects a debtors credit score for as long as they keep making payments on that account, how crazy is that!

Take a moment and ponder how amazing it would be if Judges no longer were forced into a position of simply rubber stamping all credit card defaults as being the same. Take another moment and wonder why hasn't this been thought of before. 

Or maybe allowing a credit card defaulter to plead involuntary default has been thought of before, and simply shunted aside by the financial elite in the name of higher profits and lower civility to the common person.

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