Sunday, December 14, 2014

How To Tell Debt Collectors To Pound Sand On Old Foreclosure Debt And Collection Accounts

I have a love/hate relationship with debt collectors.  I hate that they even exist because I believe for the most part the industry is legally allowed to attempt to collect money that doesn't belong to them.  They get away with lying, filing bogus lawsuits, twisting the truth, unfair practices, deceptive practices, you name it, they do it.  The love part of the relationship is that I just love, love, love beating them at their game.  You see, when you know the facts and laws to beat them down, it is a real pleasure to make them go away.

Every now and then I read an article about some outrageous scheme debt collectors employ on consumers.  The latest one is going after former homeowners who lost their houses to foreclosure. Since at least last year, they have stepped up going after the deficiencies left over after foreclosure. These homeowners have already walked away from an insane mortgage situation or lost everything and have spent the last few years trying to rebuild their credit and get back on their feet. Now, in swoop the vulture debt collectors to knock them down again and take what doesn't belong to them. Well I'm here and I am so ready to go after them and help those of you who have them climbing down your backs.

Now, this will apply to debt collection firms going after the foreclosure deficiencies but also those that are hounding consumers with bad credit card debt as well.  The reason they are called debt collectors and not creditors, is because they are 3rd party collectors. This means that they are not an original party to any transaction. They buy bad debt. That mere fact means that they have no contract with you and you don't owe them squat.

It is very important that as soon as you receive a notice from them, you need to respond.  You see, they have to comply with the FDCPA - the Fair Debt Collection Practices Act.  The have to send you that notice within 5 days of initiating collection activity and the notice has to have certain language in it that advises you of your rights to dispute the alleged debt.   Exercising your right to dispute and demand validation is what will start the process of backing them off. If they don't comply, you get to sue them.  

For the most part, they are going to respond to you and tell you a little bit about the history with the alleged original creditor and then how much the deficiency is and now you owe them. Listen real good now everyone. Some paper with their supposed facts and claims of accuracy is NOT validation. It is NOT proof you owe them. I don't care if they send you a copy of every single bill from origination to foreclosure and then some.  Its not validation. Even if they send you a copy of your promissory note with your signature on it, that is NOT validation!

Validation is proof you owe THEM!  Have you ever contracted with that 3rd party debt collector and agreed to do business with them?  Did they ever contribute something of value to you in exchange for your money?  What they are trying to collect on is a contract that was void from the get go and a contract that was discharged as a defective mortgage, which eliminates the debt. They are trying to collect on a loan that was paid off by insurance, sometimes several insurance policies so the alleged original lender was made whole a long time ago, and maybe they collected on the PMI/MIP, and don't forget the FDIC which kicked in a lot of money that put more money back in the pockets of the alleged note owner than they paid for it.

Validation includes proof that they own the alleged account and/or are authorized to collect on the alleged debt.  It includes a contract that bears your signature agreeing to do business with them specifically. It includes the documents that prove every single aspect of the alleged debt is legitimate.  If they ever produce a contract naming them and you, can they prove it is a valid contract?  A valid contract has no less than 4 essential elements. An offer, acceptance of the offer, mutuality which means equal risk for both parties, and a meeting of the minds, which means full disclosure.  I can pretty much guarantee you that even the original contract was lacking the last two essential elements.  They would need to prove value contributed that was at risk and full disclosure, neither of which an original bankster lender can prove nor can a 3rd party debt collector.  You can't prove what doesn't exist.

So start with validation, then respond to their claim of validation. Start slapping down everything they have claimed by telling them you refuse to accept what they have failed to prove.  If they haven't even bothered to try to send you any documentation, all they have then sent you is hearsay.  Hearsay is not admissible in court and its not admissible as validation. Hearsay case law has the courts calling it incompetent and so should you.

Another thing that you need to be on your toes about is the Statute of Limitations.  Every state has their own number of years for the alleged debt to be "actionable" detailed in their Statute of Limitations for debt.  "Actionable" means they can bring a lawsuit against you. This applies to all debt whether credit cards, loans, open contracts or  written contracts. Mortgage loans fall under the Statute of Limitations for Written Contracts.  The statute doesn't start running from the date of the foreclosure (or in the case of credit cards, the date of charge off). It runs from the Date of Last Payment. If you were able to drag out your  foreclosure for 2 years, and you're in a non-judicial state, look up your state's statute for written contracts and start counting the years.  I bet you're getting close.  If you're in a judicial foreclosure state, unfortunately, they got a judgment.  In these types of cases, you need to look up the statute of limitations for judgments. 

Do you want to hear some good news? If you had a judicial foreclosure and the alleged lender or pretender lender got a judgment against you, which also gave them a deficiency judgment against you, most likely, the scumbags that are coming after you are not the party that got the deficiency judgment. Most likely they are 3rd party collectors that are not mentioned ANYWHERE on the deficiency judgment.  3rd party debt collectors buy bad debt, including deficiency judgments.  So, even though they will claim you have to pay the judgment amount plus interest and fees, you don't have to pay them!! If they want to make you pay, then they will need to validate the debt, and a copy of a judgment is evidence of a debt but not evidence that it is owed to them!

So, let's start fighting these debt collectors, my friends. Don't just let them take your money. Don't just let them screw up your credit. Make them prove it and while you're at it, track their FDCPA and FCRA violations.  Those are leverage!  Fight back, demand validation. Demand proof. Accept nothing less than the full proof.  Until they prove it, (which legally they can't), they have to cease all collection activity.  That's how you make them pound sand.   It doesn't happen overnight. It takes consistency. It takes determination. It takes smashing the law in their face over and over and over again. But it's worth it. Oh yes, it is worth it. It is such a wonderful feeling when you beat them and send them packing.

More good news. I want to help people who are hounded by debt collectors. So, my partner and I have decided to offer a Christmas Special.  If you would like us to help you fight to get rid of collections by debt collectors, and of course other items on your credit report that shouldn't be there, we would love to do so.  We will discount $100 or $200 or $300 off the amount of the cost of our services. Our prices are based off the number of derogatory accounts to go after, so I can't quote actual prices here. This special is targeted for collection accounts so if you have at least FOUR 3rd party collectors furnishing their lies on your credit reports, you qualify for our Christmas Special.  

We are running this special for 2 weeks. From now until the last day of this year, December 31, 2014, if you contact us, let us audit your reports, have your consultation, and decide to use our services, you can save quite a bit of money.  So contact me right away. My email address and phone number are up at the top of this blog, on the right hand side. I'll need copies of your credit reports from the 3 major bureaus to get started so get those together as soon as you can.  Let us help you have a MERRY CHRISTMAS and a Fresh Start in the New Year!

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  1. Is a payment coupon from the oc considered validation? Ty

    1. Hi Ty, nope. It's not validation. Its proof someone made a payment on some account. Validation needs to include a copy of the contract with your signature agreeing to do business with the company/person who says you owe them money. It includes a full accounting from origination to present, showing all monies lent, payments, credits, fees, interest, etc. that balances with the amount they say is owed. Its documentation proving that they have the right to collect the alleged debt. You can even tell them they have to tell you how much they paid for the account. There is case law for all of that.

      There's a lot of things you can request that has case law, or law/statutes to back it up. But one lousy payment coupon - or 50 of them is not validation.


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