STUDENT DEBT — Reduction Suggested, Especially for Medical Students

The first thing to think about is how many of these student loans were securitized or are subject to claims of securitization and assignments. Based upon anecdotal evidence collected thus far, most of them were securitized. That means that many of the defenses suggested for mortgage foreclosures are equally applicable to student loans. AND it might, as we have previously suggested, provide an opening for avoiding the exemption from discharge in bankruptcy, where student loans ordinarily cannot be discharged.
The level of student debt has exceeded $1 Trillion, which means that either the banks or the government are going to absorb a huge loss financially. If the Banks “Securitized” the loans then they are facing a huge loss if the loans are paid off, which probably explains why the loans were artificially inflated, like the homes. With the homes it was done through fraudulent appraisals using far-out “comparables” that didn’t apply. With private student loans, the banks pushed the students to take on “extra” money for living expenses and even personal expenses that would be considered luxuries.
The reason is as simple as mortgage meltdown. The debts, the fees and the marketing of these debts were all facets in making medicine — the practice and the protocols — all about the money. Doctors or nurses and other medical people who might want to live in a peaceful small town can’t go there because they are required to keep their income up in order to pay back student debt obligations which are non dischargeable in bankruptcy.
The answer coming from economists is that if we value medicine as a society and the current system is not working because people in all places are dying or suffering as a result of money issues, then it follows that if we want a better society, we should turn the vision of medical people from money to the services we need for our society. Sure the banks will and other people who speak from prepared messages from idealogues are going to scream. But their screams are drowned out  by the grief of those who lose loved ones or watch them suffer.
It doesn’t even make sense economically. If doctors and hospitals were able to turn their debt obligations into something that could be managed without turning away patients in need of medical care, our tax dollars would not be used for the extraordinary expenses of Emergency rooms or procedures that are of doubtful value to the patient but that are necessary to meet the expenses of servicing debt.
Costs would immediately be reduced and we would be on our way back from third world status in the effectiveness of our medical care. We would be able to reduce costs so much that we would be spending the same or less than those countries who provide the same level of care but whose effectiveness is extending life and limiting suffering are by all current measurements far beyond American medicine at half the cost. With costs going down, the profit motive would recede as the helping mode kicked in to remove a huge stresser that interferes with American productivity and innovation.
Our worship of money has distorted the individual values we hold dear. Our society no longer reflects those values and is literally paying for it through the nose. A great number of bankruptcies are filed by people cleaned out by medical expenses that are discharged while the providers never see the relief. The debts that are wiped out include all the debts, not just the target debts like home mortgages, credit cards, student loans etc.
So our current system is unfair, it is too expensive only because of the cost of education, which is prohibitive even with loans, and it is by most accounts declining in quality except for certain procedures on which we have still cornered the market.
The same holds true where debt gets in the way of the survival or vitality of any processes operating in our society. Obama has taken care of a portion of this for future students. But the existing ones see no way out. And this false morality based upon money rather than God or moral imperatives is now reducing the number and quality of teachers, firefighters, first responders, police and other social services that cannot attract great teachers or leaders because it offers a lifetime of slavery to debt.
At a minimum, household debt should be reduced (like  Iceland did it) for those who provide essential services and largest parts of household debt are student loans and mortgage debt both of which were pushed onto unsophisticated and unsuspecting victims of a society where money and banking are the measurements of success instead of service to our society that we all need and expect if government is to mean anything.
Any person who provides these essential services should be either exempted from repayment unless their salary allows it through a means test, much like they don in Chapter 7 bankruptcies now. It doesn’t matter whether the debt is technically designated as student debt, or credit card debt, consumer finance or mortgage. The facts are that we are paying more and getting less. Instead of investing in improving the education of providers of essential services we are firing them for lack of money or making them spend time and money on trying to wrangle out of the debt.
The two best places to start are the private student loans in which the risk was non-existent thus encouraging banks to sell larger loan packages to prospective students than they needed, and Mortgage debt which was done the same way. There is no reason why such loans should be sanctimoniously regarded as off limits. Veterans of foreign wars were given their education and help in buying houses at low rates and easy payments without any “resets” that would ruin their lives as they lost their homes and lifestyles. This makes no sense in a society seeking to survive and prosper. We are practically punishing those who serve their country and creating economic barriers to those who would serve their country and who have a lot to offer.
Even as the battle rages over principal reductions to banks who never had any risk in underwriting loans thus producing ever larger loan packages that could never be read we ought to listen to economists who point out that we are spiraling down as a society even though it appears as though the stock market, for the moment is going up. It’s a good place to start.

The Debt of Medical Students

Mortgage Rates in U.S. Decline to Record Lows With 30-Year Loan at 3.84%

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Editor’s Comment:

It appears as though Bloomberg has joined the media club tacit agreement to ignore housing and more particularly Investment Banking or relegate them to just another statistic. The possibilities of a deep, long recession created by the Banks using consumer debt are avoiđed and ignored regardless of the writer or projection based upon reliable indexes.

Why is it that Bloomberg News refuses to tell us the news? The facts are that median income has been flat for more than 30 years. The financial sector convinced the government to allow banks to replace income with consumer debt. The crescendo was reached in the housing market where the Case/Schiller index shows a flash spike in prices of homes while the values of homes remained constant. The culprit is always the same — the lure of lower payments with the result being the oppressive amount of debt burden that can no longer be avoided or ignored. The median consumer has neither the cash nor credit to buy.

Each year we hear predictions of a recovery in the housing market, or that green shoots are appearing. We congratulate ourselves on avoiding the abyss. But the predictions and the congratulations are either premature or they will forever be wrong.

The financial sector is allowed to play in our economy for only one reason— to provide capital to satisfy the needs of business for innovation, growth and operations. Instead, we find ourselves with bloated TBTF myths, the capital drained from our middle and lower classes that would be spent supporting an economy of production and service. That money has been acquired and maintained by the financal sector giants, notwithstanding the reports of layoffs.

From any perspective other than one driven by ideology one must admit that the economy has undergone a change in its foundation — and that these changes are ephemeral and cannot be sustained. With GDP now reliant on figures from the financial sector which for the longest time hovered around 16%, our “economy” would be 50% LESS without the financial sector reporting bloated revenues and profits just as they contributed to the false spike in prices of homes. Bloated incomes inflated the stampede of workers to Wall Street.

Investigative reporting shows that the tier 2 yield spread premium imposed by the investment bankers — taking huge amounts of investment capital and converting the capital into service “income” — forced a structure that could not work, was guaranteed not to work and which ultimately did fail with the TBTF banks reaping profits while the rest of the economy suffered.

The current economic structure is equally unsustainable with income and wealth inequality reaching disturbing levels. What happens when you wake up and realize that the real economy of production of goods and service is actually, according to your own figures, worth 1/3 less than what we are reporting as GDP. How will we explain increasing profits reported by the TBTF banks? where did that money come from? Is it real or is it just what we want to hear want to believe and are afraid to face?

Minnesota Prepares to Sue A Debt Collection Agency: Robosigning

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

“The Minnesota attorney general, Lori Swanson, accused Encore of fraud, saying it had filed false affidavits to collect consumer debt that was not owed or had been already paid off.”



The significance here is not just that robo-signing was used, which violates even common sense rules of evidence. It is the fact that the false affidavits were used to collect debts that were not due or had already been paid. This is the same as the current foreclosure mess, where pretenders are using false representations, fabrications, forgeries and perjured testimony to collect on non-existent debt, and debt which has already been paid by parties who have expressly waived any right to subrogation, which means they paid, but they did not purchase the receivable — to protect themselves from being called “lenders” or being subject to claims from homeowners for fraudulent or predatory lending.

As you will see from the description below, this opaque construct of conflicting “deals” and “trades” created a context in which the borrower’s obligation would be paid, regardless of whether the homeowner made the payments or not. The pretender lenders stepped in to the void created by this scheme to enforce a void note, void mortgage and an obligation in which it was neither the lender nor the purchaser of the receivable.

The pretenders are able to do this under the noses of the people who were the actual lenders because the investors don’t want to accept any responsibility for the fraudulent and predatory lending and documentation.

On a basic intuitive level it would seem that if a borrower received the benefit of funding of a loan, that the borrower was responsible for paying it back, regardless of what back-room deals were made. But in the words of Renaldo Reyes, Chief Asset Acquisition Officer (i.e., “trustee”) for Deutsch bank, the whole thing is COUNTER-INTUITIVE. That is why the courts are having so much trouble with these foreclosures — AND THAT IS THE SOLE REASON FOR THE USE OF ROBO-SIGNERS, FABRICATED DOCUMENTS AND FORGERIES TOGETHER WITH PERJURED TESTIMONY.

If the creditor was actually named, the real issues would come out and the issue would be completely reframed — because the the real creditor doesn’t want the house or the foreclosure, and in many cases is still getting paid. This leaves a “floating obligation owed to nobody” which is what the pretenders are exploiting and using on their balance sheets as “assets.”

Payment came from third parties who expressly waived rights of subrogation — it is right there in the insurance, credit default swap and buy-out agreements in the bailouts. That was intentionally done to remove the insurers or counterparts from any potential liability for fraudulent or predatory lending claims. But you can’t pick up one end of the stick without picking up the other end. The payments were received by agents of the investors — and the servicers keep on paying the payments to assure the imposition of absurd fees and costs. So at no time is the borrower’s debt to the investor-lender ever in default despite representations to the contrary in court. AND THAT IS WHY THEY USE ROBO-SIGNING, FABRICATION AND FORGERY — BECAUSE IF THEY WENT TO THE ACTUAL CREDITOR, THE DOCUMENT WOULD NOT BE SIGNED. SAME THING WITH CREDIT CARDS, STUDENT LOANS AND OTHER CONSUMER CREDIT WHICH INCIDENTALLY WAS MOSTLY SECURITIZED AS WELL.

Minnesota Prepares to Sue A Debt Collection Agency


Minnesota’s attorney general accused the Encore Capital Group of cutting corners by filing “robo-signed” affidavits in debt collection lawsuits, the same practice for which banks have come under fire in home foreclosures.

Encore shares fell as much as 10.3 percent before closing with a 3 percent loss on the day.

The Minnesota attorney general, Lori Swanson, accused Encore of fraud, saying it had filed false affidavits to collect consumer debt that was not owed or had been already paid off.

Encore is one of the nation’s largest debt collection companies, and often buys debt from credit card companies.

The allegations follow an Ohio federal judge’s preliminary approval on March 11 of a $5.2 million class-action settlement of similar claims against Encore’s Midland Funding unit.

An Encore spokesman, Mike Huckman, had no immediate comment.

Robo-signing is a term coined to describe employees’ signing of litigation documents without reviewing their contents. All 50 state attorneys general are investigating robo-signing and other practices by banks in the mortgage industry.

Ms. Swanson said such practices were pervasive in debt collection. Ben Wogsland, a spokesman for Ms. Swanson, said she was investigating about a half-dozen other companies that buy debt.

Encore, which is based in San Diego, had through year-end invested $1.8 billion to buy 33 million accounts with a face value of $54.7 billion, according to its annual report.

Ms. Swanson wants the Ohio court to clarify that the proposed class-action settlement does not bar government agencies from pursuing similar litigation. She is seeking to file her lawsuit in a Minnesota state court, Mr. Wogsland said.

Mortgage Meltdown and Savings

Any questions about the fundamentals of our economy? This is the result of driving consumers to pay for goods they don’t need or want with money they don’t have, and then covering it with equity from their house which is now vanishing before their eyes.



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