Debt collection crybabies

[ricket]

Re: Debt collection crybabies

Obviously, you have absolutely no experience with a BK proceeding, which will be the inevitable outcome for the Shoulders and the Williamsons,

Obviously you read my post and made up some contrived argument that I wasnt actually making about their specific case. I mentioned absolutely nothing about their case and was only stating my point in relation to those who purchase debt from a 3rd party for only 35c on the dollar, but expecting 100c in full from the original borrower.

something that Williamson has already factored in on his cost basis. A very long, costly, emotional and drawn-out proceeding. There is a tremedous amount of risk for Willamson and the likes as insurance for said properties are very hard to secure for these scenarios(distressed titles). Williamson may eventually recover a corpse of a health club(after two years+ of litigation) since the Shoulders have nothing to lose here as their whole life is at stake. They will literally fight tooth and nail regardless of ryhme or reason. I read somewhere today(do not have the link) that currently 30 percent of all RRE foreclosed properties are vindictively damaged with some exceeding the value of said property.

A long, costly, drawn-out proceeding? Sure. But that's the risk he takes for wading in on such a transaction. Like I said, if someone wants to fight me for that other 65c they better come at me with guns drawn cause I'll fight them "tooth and nail" as you say. How much time, money, and effort has the owner himself put into the Health club? How come his "financial stake" is completely forgotten in all of this? He can't get back the time and effort he put into the place or any of the interest payments he has *already* made.

In the future, you may want to think before you post. Otherwise, you just look foolish to the wise.

You should seriously take a look in the mirror and think about what's right and what benefits both sides, instead of just following the law (ie BK proceedings). Those "following the law" are the same ones who refused to defend the political victims of totalitarian dictators because they were breaking said law. Just because it's encoded by a corrupt legislative system, doesn't make it "right". You should stop being so naive to believe that most of the laws that have been enacted are for your own good.

20% profit? You are so clueless.

Why am I clueless? Why should anyone profit more than that from a technicality of the law? The "law" as I interpret it means that no man can make more than a set amount no matter how much money he has. Simply having money doesnt give you the power to extract EVEN MORE from another just because you can put it somewhere or invest it in a "distressed title" before someone else.

[ricket]

Re: Debt collection crybabies

It takes two to tango. The responsibility for every loan (or actually transaction) lies with both party. In what crazy world is it OK to lend $10 mil with insufficient collateral? In what crazy world is it ok to lend to j6p $500k for a NINA mortgage?

Thank you $#*, I think you really understand the situation about loans and our financial system more than most others on here. Most people in the general society have drank the koolaid that our problems dont come from a faulty financial (ie loan) system and instead are only the fault of those "crybabies" who took on too much debt and overextended themselves. They are blind to the true reality that the loan system itself is *purposefully* designed to make these loans fail. The fact is, is that as soon as interest is entered into the picture, the loan become mathematically impossible to pay back, without someone else having to take out another loan at a future date to service the interest that is never created in the *first* loan.

This is all compounded by all of the other goofy things such as Fractional Reserve Banking, etc that exacerbate the problem and allow the lending curve (ie principal vs interest owed) to "go exponential" much faster than normal.

Here's the money shot for all those paying attention: EVERY SINGLE LOAN THAT IS ISSUED BY A BANK TO THE GENERAL PUBLIC IS MATHEMATICALLY IMPOSSIBLE TO PAY BACK BECAUSE ONLY THE PRINCIPAL IS CREATED IN THE ISSUANCE OF THE LOAN AND THE INTEREST TO PAY IT BACK MUST BE CREATED IN *ANOTHER* INTEREST-BEARING LOAN TAKEN OUT AT A FUTURE DATE OR MUST COME FROM A 3RD PARTY WHO HAS *ALSO* TAKEN OUT AN INTEREST-BEARING LOAN

How can you all not get that? This isnt about people not paying back loans. This is about lenders KNOWINGLY scamming the public. Lenders officially endorsed by the Federal Reserve (they are chartered), which is then officially endorsed by the US Government through the Federal Reserve Act.

Symbols, you're making very wide ranging points. Let's dial this back down to the thread discussion. I acknowledged in my first post on this thread that the bank did not do their job - they were poor business people and lost their business. Crushed, dead, gone. That is obvious from the outcome, the FDIC took them over. This discussion has much more to do with the other party. As flintlock characterized them, the 'crybabies'. As you say, it takes two to tango, why should the 'crybabies' keep dancing after their partner has died? Is it the responsibility of a 3rd party to carry the dead body around and pretend it has life?

He made wide ranging points, because you made wide ranging accusations that all of the borrowers were at fault because they overextended themselves and they should be the only ones who pay the price. When in reality, it was the predatory lending by the banks (enabled by the Federal Reserve) who issue money at their sole discretion, yet make it impossible to pay the loans back. They are *also* to blame, and should *also* accept responsibility.


To summarize my point above: If the entire amount of every loan (for example, see a "Truth in Lending" document) was added up across our entire financial system, this amount would be *more* than the total amount of money that has ever been issued by the banks. This implies that more and more loans have to be taken out (ie money is "created" by banks issuing loans) just to pay back that debt. This then implies that on a fractional level, every single loan is "short" the amount needed in our entire monetary system to be able to pay it back. Which means, again, that *every* *single* *loan* *issued* *by* *a* *bank* *is* *mathematically* *impossible* *to* *pay* *back*. And yes, people pay back loans all the time, but they have done so by putting someone else further into debt in a different part of the financial system, but again, in order to pay off one loan, you have to take out another, which means the net sum of the number of loans has effectively remained the same.

[santafe2]

Re: Debt collection crybabies

If it was so easy, everybody would just borrow 10 million dollars and get rich. My father was a home builder for 30 years. He always stayed small, building 5 or 6 homes a year, but was able to survive every recession, while most high flying builders repeatedly went bankrupt. He didn't buy boats, fancy cars, and even his personal home was fairly modest. He saved his windfalls. When a recession hit around 1990, and he had three homes sitting over a year, he was able to use his own money to owner finance( at 11%!) and ended up actually making good money instead of giving the homes back to the bank which is what most builders were doing.

My wife and I are both business people. She, like your father, is a builder. It's a business that is great when the economy is good and difficult at best when the economy turns down. It's not just a matter of selling your specs and unwinding debt prior to the downturn but reinventing your business and becoming a remodeler while ensuring you have enough capital to buy property and take that property through zoning and planning during the downturn so you're ready to build again during the next economic cycle. As you mentioned, most builders don't navigate this cycle well.

When she's designing and building homes we take out construction loans to cover the cost of materials and ensure employees and sub-contractors are paid on time. We've gone through this cycle many, many times and every time we do it we know that whatever may go wrong with the project be it cost over runs or unforeseen regulatory issues, the bank expects to be paid on the agreed schedule.

These loans are not like the non-recourse home loans a home owner will receive. These are full recourse loans. That is, if the assets of the project don't satisfy the balance of the loan, the bank - or their agent has the right to take other assets as necessary to repay the loan. That's the way business loans work.

We accept that risk every time a project begins. That's why we pay for the land and development costs prior to building. It lessens the chance that any one project will lead to the experience these folks in Arkansas experienced.

I'm sympathetic to their situation but every business owner knows that when they take a loan to improve or expand their business, they chance losing everything.

[Supercilious]

Re: Debt collection crybabies

Here is the problem guys:

Some of the debts are so hard to collect that the F.D.I.C. lets these loans go for a song. LeMire Schmeglar, a mortgage broker in Chicago, bought 191 delinquent loans with a book value of $6 million. He paid just over $15,000.

That is like 0.2 cents on the dollar. Why didn't the FDIC negotiated with the debtors the loans at, let's say 10 cents on a dollar? Because the loss on those loans which got to FDIC was paid by the taxpayer.

And here we get to the old argument:

But everyone's hands are tied here. If FDIC or Bank had negotiated with the debtor to modify debt to 60 cents on the dollar, it will create problem for the other Good loans which are functioning.

That is the old fallacy of the pound of flesh argument. All economic systems which used this rule failed. Do you think the babylonian kings were wiping all debts at coronation because they were good hearted or they loved their people? ... Of course not.

Unsustainable debt cannot be repaid, and the longer the environment of unsustainable debt is maintained the bigger are the economic losses for everybody (including the bond holders).

So going back. Does anybody here believes it is ok that someone else is allowed to buy you debt (your mortgage) at 0.25 cents on a dollar , but the bank (which sold your debt) refuses to negotiate with you a few percent decrease in interest rates ?

This is how irresponsible creditors and bond holders lose their money and this is how the only people who make a profit are the loan sharks.

Well, for time being the irresponsible creditors and bondholders haven't lost too much because the losses were covered by the taxpayers ....I mean by those who are now foreclosed and told a contract is a contract.

Am I the only one to see there is something wrong in this picture?

Only people who don't know economic history can make the famous "pound of flesh" argument. Such a model is idiotic because in the end everybody loses, including the creditors. History also teaches us that when this model is pursued to absurdity, the creditors usually lose more than their money ...

Excessive debt cannot be repaid and should be written off. Period. That is not socialism... it's math....and this was well known and understood in all great ancient civilizations.

If TSHTF and people revolt, and start chasing down the creditors, would anyone sell a life insurance policy to that loan sharks who bought $6mil debt with $15,000 and now throws out people from their homes?:rolleyes: I guess not because that would be a proof of irresponsible insurance practices

[ricket]

Re: Debt collection crybabies

Am I the only one to see there is something wrong in this picture?

Not at all. However, I do feel that most of society (sadly enough) feels that way. And they will blindly support the most criminal of creditors without even realizing or reading up on the what they are actually supporting.

[santafe2]

Re: Debt collection crybabies

That is like 0.2 cents on the dollar. Why didn't the FDIC negotiated with the debtors the loans at, let's say 10 cents on a dollar? Because the loss on those loans which got to FDIC was paid by the taxpayer.

I've no interest in defending the FDIC but I find it curious that you won't distinguish between these well-to-do business people and the many people who were victims of unethical loan practices. These people are not Addie Polk.

If you want to make a distinction between someone taking a loan to make a profit and someone taking a loan to own their own home, I'd see some merit in your argument but as your logic stands, I see no reason Warren Buffett and Bill Gates wouldn't fall under your rubric. Ricket's is even less clear with his banks bad / people good argument, (although the asterisks are a nice touch).

[Supercilious]

Re: Debt collection crybabies

I've no interest in defending the FDIC but I find it curious that you won't distinguish between these well-to-do business people and the many people who were victims of unethical loan practices. These people are not Addie Polk.

It doesn't matter how much money they loaned ow wht is their living standard, or if it was a loan for business or for a house as long as the system is crooked.

If the loan shark could buy their debt with 0.25 cents on a dollar, they should have been allowed to participate too in the bid. The fact that the bid was conducted by FDIC and the loss from $6 mil to $15000 was paid by the taxpayer is even more appalling. This a crooked system.

If you want to make a distinction between someone taking a loan to make a profit and someone taking a loan to own their own home, I'd see some merit in your argument but as your logic stands, I see no reason Warren Buffett and Bill Gates wouldn't fall under your rubric. Ricket's is even less clear with his banks bad / people good argument, (although the asterisks are a nice touch).

I would love to get Warren Buffet's debt at 0.25 cents for a dollar in a bid he wouldn't be allowed to participate. See where is my problem?

If the "cry baby" was allowed to participate in an open bid on his own debt and the loan shark outbid him, then I would have no problem. The same for the J6P who has his mortgage sold for 20 cents for the dollar and the PPIP deal is funded with taxpayer money, while he is told he cannot get a renegotiation of his mortgage to lower his monthly payments with $200 a month.

Am I the only one (or one of the few) to see what is wrong here?

I don't remember any constitutional amendment saying that we all have to pay a private tax to Goldman Sachs and to loan sharks. .....