Debt racket

What's in your wallet... and will it prompt your bank to sell you to a bounty hunter?

Iowa Attorney General Tom Miller, the architect of last year’s $25 billion national mortgage settlement, is leading a multi-state investigation of these so-called debt buyers and overall debt collection practices, according to his office.

Debt buyers often purchase just a spreadsheet with names of delinquent borrowers from banks after accounts become more than 180 days past due, Holland said. Judges, he noted, grew alarmed by the number of cases involving debt buyers that lacked proof of outstanding debt or that contained generic testimony.

Today's Must-Read

Barry Ritholtz explains the Foreclosure Fraud Crisis

It is a legal impossibility for someone without a mortgage to be foreclosed upon. It is a legal impossibility for the wrong house to be foreclosed upon, It is a legal impossibility for the wrong bank to sue for foreclosure.

And yet, all of those things have occurred. The only way these errors could have occurred is if several people involved in the process committed criminal fraud. This is not a case of “Well, something slipped through the cracks.” In order for the process to fail, many people along the chain must commit fraud.