Now It’s Fabricated or Unenforceable Student Loans

The CFPB laid down some serious fines on National Collegiate Student Loan Trusts and its debt collector, Transworld Systems, Inc. The firms were collectively ordered to pay $26.1 million for attempting to collect on loans that were at best out of date and at worst nonexistent.

The Consumer Financial Protection Bureau (CFPB) specifically alleges that the firms would drag “borrowers” into court or pursue aggressive collection actions on consumers whose debts had already expired — or on debts that they could not actually prove were owed. The action against the entities further alleges that they relied on false and misleading legal documents to compel funds out of consumers illegally.

{Editor’s Note: Same dog, different house. When will the CFPB start prosecuting the same crimes and other illegal acts that lie at the heart of nearly all foreclosures?}

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It is not merely a technicality that banks and servicers are pursuing and compelling the forced sale of homes based upon fabricated and forged documents. It’s a fact that in nearly all cases the foreclosing party has no financial interest in the debt. The unthinkable has happened, to wit: the banks figured out to create a void between investors and borrowers where neither one knows of the existence of the other. The banks stepped into that void to steal the money and the loans to the detriment of both investors and borrowers/consumers.

The risk of loss on a bank business plan should not fall onto its victims. We didn’t let Bernie Madoff keep the money or “enforce” nonexistent trades. Why are we letting banks and servicers enforce nonexistent contracts?  Why are we allowing the perpetrators of the gigantic fraud to continue trading derivative instruments that are based upon nonexistent contracts?

We are allowing this to happen — all of us. By not speaking truth to power we are not only condoning past blatant fraaudulent actions, we are encouraging new rounds. The current issues with student loans are only the tip of the iceberg.

6 Responses

  1. The thing is: the servicers in the student loan “business” are the culprits. I too, had a rather small student loan and when it was transferred to a new servicer they tacked on $11,000.00 in fess, just for the transfer. This is sheer insanity. At this rate I will never be able to pay it off and I’m guessing that’s the point!

  2. as for loans with treasury offset collections, it would be a miracle to get the dept. of ed. to follow their own damn rules as far as ceasing collection activity on disabled persons accounts. but they don’t. ive told everyone there is to tell. nobody cares if you live on $750/mo.

  3. Contact ur Congress person, senators. We don’t need to have CFPB destroyed like Republicans want and CFPB/Dems need to enforce the law against all banksters.

  4. Good post.

  5. who do you tell ?

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