EDITOR’S NOTE: Based upon my calculations that amount was increased by over $3 trillion resulting from the securitization scam on home mortgages, student loans, auto loans and other consumer loans.


By the way, for the bankruptcy experts out there, I have a question. If a student loan is not dis-chargeable because it has a government guarantee, does it remain non-dischargeable if the guarantee was meant to apply but didn’t? Virtually all student loans were securitized. That means that the bank that fronted the transaction as the originator received a guarantee, to prevent it from undertaking a risk that might be more than the bank wanted to handle. But if the bank elected to use another means of avoiding risk — like a table funded loan where they never loaned the money in the first place, what right does the undisclosed creditor have to declare that the student loan is non-dischargeable? And if the receivable was sliced and diced into hundreds of parts and subjected to the same cross collateralization, over-collateralization, guarantees and insurance, has not the risk changed in character sufficiently that the government guarantee no longer applies?

5 Responses

  1. @ Sherry

    I took out student loans to help my son pay for college. Paid on those loans until the ecomony went to hell. We filed BK and I have filed paperwork where they give you 2 years. I am off that now and I am not in any better financial condition to start paying on the loan again than I was during BK. In fact, we are worse off. I will be shortly getting calls for payment. Whoever says BK is a fresh start does not know what they are talking about.

    @ James McGuire

    I haven’t read the ESIGN USC 7003 you posted yet. So in advance how would that help those of us who did sign electronic promissory notes for student loans?

    We also lost everything. Being in the construction business, that should not have been a surprise to anyone. Builders we worked for were going BK and that resulted in us being unpaid for our labor and the materials that we bought to do the job. The Trustee in our case wanted 6 years of both our personal and business income taxes so he could have someone audit them. Our BK attorney said the Trustee was trying to see if there was any mistakes in the past which would result in money they could take. The audit proved to be a waste of time.

    We were kicked out of our home a year ago this month. I did not realize at the time of our foreclosure the fraud that was involved until someone told me of this site. My heart goes out to you, and I hope there is someway you can stay in your home. Good Luck

    God Help America

  2. I went BK7 and of course student loans were not dis-chargeable, now Citi has given up the student loan business and I am being harassed by some collection company in India, although my student loans were in forebearance they said that isn’t true after the BK, that was a different forebearance.

    It feels like the mortgage servicing fraud perpetuated on us in 2008 all over again. Now that I have a discharged BK they can start the student loan fraud with great gusto. We lost everything due to the mortgage servicing fraud and all the things spoken about on this site. The BK Trustee couldn’t even believe our fall, we must be hiding something to lose that much that fast! But, I am still stuck with the Student Loans and now it is with loan sharks in India.

    If someone goes on to do something about the student loan problem and securitization let me know, I will join up. Right now I am just trying to figure out how to save our home from the Pretender Lender as the Automatic Stay has been released.

  3. Louise
    insurance companies… ARE BANKS!!!!!
    With no meaningful regulatory body for consumers ,all financial institutions will and do become predatory , end of story!
    IF they deal in $ = the predator/parasite

  4. Sounds like the same old krap. Securitization should be made illegal. It seems to me that the insurance companies must be as sick of this as those of us with a pretender/lender note and mortgage.

  5. Today, students notes are commonly signed as an Electronic Promissory Note (The Master Promissory Note for multiple year use) and being electronic lacks supporting laws.

    Dis-Chargeable, the hell you say, they couldn’t even exist.

    ESIGN 15 USC 7003, excludes UCC Article 3, Negotiable Instruments.

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