Transcripts For CSPAN2 After Words 20141105 : vimarsana.com

Of the fun to read what was that like . Guest i was at Brandon Wilsons Collection Agency. He said to me, you have to get on the phone. If you can observe all you want but you wont understand what its like and i was reluctant for a few reasons. They started kind of her running me and saying, you have got to try this. I sat in front of one of these terminals. They had it on an autodialer says that debtors whose Contact Information had been verified would route to me. The first call came to me, and it was a woman who owed 450 on herself on bill. I said something like, man, i see you of this with interest, but we can give you a reduced rate. Would you consider paying this. I heard myself thinking, i would not paid. A weak opening gambit. Eventually we are talking and i am trying brandon told me you have to marry the daughter, have such empathy. What is going on with you in your life . Are you working . Connection. And at one point she says maybe i can write you a check, but i dont seize on that right away. And then she hangs up. And he is right behind me playing coach and he is like, look, you fail that this not because you did not collect. At the moment she offered to make that check he should have said, okay the deal are going to send me that check . The middle of the month . Yes. Because in his psychology the minute that she promised to make a payment we have gotten her because she has committed. Now we can use that the next time. So there are a few calls like that. I was a bad collector, but what i realized at the end was i could afford to be a bad connector. I am married to a doctor, make a decent living as a writer, but if i were desperate like some of these collectors i would have gotten wise. To what i have to say and do. Host they are desperate. And that is basically guest there are some that do well for themselves. A lot of them are pretty desperate. I was at one agency, a hundred and 15 the other may 85. And that is power. Host you talk about this underworld in buffalo. You also talk about another pillar on this Debt Collection world which is las vegas you went there to do investigation. Was that like . Guest i wanted to see how Brenda Wilson was buying this debt. You remember, a former armed robber who works for airing in his finding deals on paper which are key to making a profit margin. Of course, talking to him about where he hunted or searched for paper, he said, las vegas. Every february there is a big debt buyers convention. So i asked him, can i tagalong pair he said, sure. In a february 2013i flew out to vegas and spent several days with brandon, and he was on the prowl for these deals, what he called these buckets of debt that he could bring home with them to work at his own Collection Agency or that he could then flip and sell to other folks plated was interesting. When we arrived at your, the market for debt was changing for two reasons. One was, regulators are starting to crack down a little bit which was making some of the banks nervous about who was getting a hold of their debt. The other thing is that during the credit boom of the 2000s everyone was getting a loan. Now all of the sudden people creditors are becoming more careful about who they give credit to which means that the cost of buying and the bad accounts no one collects on goes up. All this meant that he had to work that much harder to find deals. While there he was hunting for this paper that he called iran, paper appended to you want me to tell you a little bit about that . Host that is a different story. Guest so when he gets there the word around the street in the hotel lobby is there is a parcel of debt, a debt that belonged to an agency out in california that the federal trade commission shut down because they were doing all kinds of the legal stuff, collecting and threatening. And after they shed shut down this agency its assets when it into a courtappointed receiver you could seize a drug dealers car and auction it off to raise revenue. The same thing happened. But the assets of this company were largely in their paper, the debts they were collecting on paris and now basically they were auctioning off this paper, and everyone was trying to figure out how much it was worth pennies so i am going around, and he is doing his intelligence, what do you know . How much would you pay for it . A penny on the dollar, a tenth of a penny on the dollar. And i am with him one day when he meets this woman who is another debt broker. And she and he wants to talk to her because she used to sell debt to the company and was intimately familiar with the workings of the company and said, dont buy it. He says, i had a bad feeling about it, but why . And she said, well, i have reliable information from people at the company that some of the debt was stolen after the offices were shut down. And whats more, some of the change of title proving legitimate ownership of the debt is not there, and that have this information, she claimed, from directly inside the company. If you die in if you buy that debt you will be in the world of trouble. Particularly if it was stolen that means someone else to be working the same paper peso i eventually call love someone and said is it possible the some of this was stolen after the offices were shut down. And they basically said to me, i cannot tell you from 100 percent certainty so employee did not walk out the door with some paper before we shut that down. So i did more digging and looked at the terms of sale that the court was saying, if you want to buy this paper this is the contract you have to agree to, and the contract said in pretty clear language, we are making more no warranties or guarantees about the accuracy or validity of this paper being sold, so basically to some this of you have a federal Regulatory Agency shutting down a bad actor in the business, handing over its assets to a courtappointed receiver, and there is an auction, and they are selling off that part of another reason to believe that at least possibly they are selling paper that has been stolen. It was kind of mindboggling people that are meant to be cracking down and solving problems and may inadvertently be creating problems. In the independent decides he does not want to make a bit on this paper that is being controlled by his courtappointed receiver. Host again, horrifying , closing down the shop, taking that paper, not doing anything with respect to acknowledging the others involved on the other side of that paper because they dont know what is going on with the debt, what has been moved around and they could conceivably be getting calls from collection agencies that bought it, stole it, whenever that have never heard of it, never had a transaction last. You mentioned, for example, Washington Mutual and chase as two banks at the top of the food chain that had paper. But at some point chase stops selling guest correct. Host because of regulations that have come into effect after the financial crisis and the doddfrank act. Guest correct. Host why did they do it . Were there other motives, lawsuits they could have dealt with and also how did that impact the chain of other characters involved in Debt Collection . Guest right. So, the title of the book is bad paper, and bad paper is paper that there are problems with the committee and there is a lot of debt paper out there because basically what these big creditors, like Washington Mutual, chase, bank of america, whatever, for years have sold these spreadsheets out with no particularly careful organized way to buyers. The contracts that these banks create clearly have these crazy warranties in them that say, we are making no guarantee about the accuracy. And there are all kinds of problems. I saw that first hand with the people connected to the passage to adjust to give you one quick example, there was a boy and connected whose debt after going through the whole circus ends up in the court in georgia and it appears on her Credit Report and she is in danger of being sued by a hit and this woman, they say , okay, what is the story and she says, abbas up and you could tell me parents of recognize this. So i said, okay. There has to be an easy solution. Lets call chase bank which bought Washington Mutual, and we will ask them directly what is going on with this amount and at peace so i call up the spokesman and say, i have this woman right here. Her name is julie. She has this on her Credit Report and does not recognize the debt, amount to anything to eat can you help us clarify . It appears that when this was sold off there were mistakes. They call back and say, we decided we are just going to write off for dead as fraud. I said, why . And they said, we dont have any of the underlying documentation that would give us confidence that this is, in fact, a valid and accurate debt. They have some statements but not the original signed contract approved. I said, what do you mean . You are the Bank Committee said, well, when chase acquired Washington Mutual it was a rapid process and information was lost. Now, when chase acquired Washington Mutual, that was one of the largest financial acquisitions in recent history tamandua talking about a player of the financial world basically saying, you know what, we dont have this paper place of the mistakes their being made that makes this paperback are not happening at the bottom of the food chain. There is every reason to believe it is happening at the highest level of finance. Now necessarily a safe assumption to make. Host you are coming at this entire story which is one of the reasons the writing is so clear, you are coming at it from a financial point, but from the ground of, all of this and how people are impacted. The stories that surrounded the Washington Mutual, chase merger and everything that happens during the financial crisis of 2008 had come into focus as being about happening mostly with mortgages, attachments to more is lungs being lost, robosigning and all sorts of those kinds of things. This was and has been going on throughout the entire credit cards and other types of debt as well. Guest that is right. I think at this point people know that there was a lot of funny business going on with the lay mortgages were issued, and in the press there has been a lot less attention given to the idea of consumer debt, whether Credit Card Debts are paid a loan, but the same sorts of problems. The way you see this in some days more strikingly is when we get to the courts, toward the end of the book. So basically all those folks that are calling to say you have to pay this, theyre basically relying on the top off to convince you to pay. If they cannot do that often ends up in hands of lawyers and then soon. This is where it goes to the court. Many of the issues they have had with robosigning, mortgages, theyre having similar issues in Corporate Credit cards because basically the layers that are suing on this, the evidence they have is fairly hand. There are problems with these spreadsheets. And it what happens is there is a 90 noshow rate with consumers in court. If you think about it, just to make it simple, i am a guy who cant pay my credit card. A bunch of debt collectors call me to have bought my dad for pennies and cheaper on the dollar. I cannot page. Eventually bring in lawyers to sue me. And now most likely what theyre saying i know is much higher than the original principal balance, maybe three times higher because of the interest rates. So if i go to court i can challenge that and say, where did you get this number . To you have proved this is my dad . What is the brick and a printer it interest and principal. 90 percent of americans do not show up in court. They feel there is no point. And what happens is the numbers on the spreadsheet that are highly suspect to begin with then get stamped by the court and it becomes a judgment against you, and then your creditor can now garnish your wages. They dont have to call you up and beg you to pay. They can get your monthly books check, and this is happening. 10 percent of americans between 35 or 45 are having their wages garnished every week. So that is happening. Host that is astonishing. You have basically given to a very important pieces of advice for consumers out there who are involved in Data Collection process. You should be suspect about that. And also, as you mentioned, you have a much better chance of writing was ever wrong you have been involved in than if you simply do not show up. Guest that is totally true. Host that is in itself is a justice. So thank you for that. Here on behalf of the american public. You were in court. And the kind of history that georgia has in the terrace prison and idea of institution. You actually stood by some of these people. The history, originally it was conceived as a utopia they would come and get a fresh start and get out of the chains of debt. It was this upbeat, optimistic view. The irony is that is not the case in america these days. You hear a lot about how americans declare bankruptcy and get out of debt, but there are a lot of people who have a horrible Credit Rating and therefore pay higher rates on the loans they take out, have wages garnished, checking accounts cleared out and it is quite a contract. And then the other part of the question, is going to court, a fairly funny thing that happened to me. I wanted to actually see what this process was like. I followed the package of debt and went to one of the court house is where some of the debtors and connected to this package, and just to get a sense of it, i am waiting outside the courtroom and Start Talking with a couple who is being sued over Credit Card Debt and do not recognize the people that claimed to on the debt, the creditors name does not ring a bell and the amount does not make sense and there is no documentation about to break down. Derek trying to figure it out and this guy calls out their name. He says to them, i represent the people that own your debt. Lets just settle this right now. You can pay me and we do not need to go before the judge. He reaches into his briefcase and pulls out this document that looks almost like a credit card statement , a markup of a credit card statement. The amount, name, address, and at the top in bold print it says, this is not an actual credit card statement. Theyre looking at this. They Start Talking to this lawyer. At some point i say, do you have any documentation to prove that you do, in fact, on this debt or any further information that gives a breakdown of the debt . And he says to me, are you a lawyer . And i say, no, im writing a book but he says, well, you cant represent them and as it escalates he says, im going to take you in front of the judge permit the return to the court room and with this couple and a woman who is on the hook for this debt the judge calls her up and be up as well. Again sworn in together. So i am sworn in. The lawyer suing on this debt says, proceeds with his opening argument and says, mr. Harper and here appears to be practicing law without a license. Could you please tell him he could face criminal sanctions for doing this. And i say, your honor, i just asked a question, trying to figure out the progress with these folks i met in the 15 minutes ago. This goes back and forth, and finally the judge says to this lawyer, what do you want to do about the matter of the debt that this woman knows. And he says, let me consult with my client. He comes back and says, your honor, we are going to drop the case. This point me in this debt elected each other like, what just happened. What got into the hallway and there is a geithner with Georgia Legal Services who says basically to us cannot tell you what just happened, he said the magic words. The magic words are prove your case. In other words, this couple simply by showing up in court and pressing back just a little bit asking for the thinnest amount of evidence of legitimacy of the debt and a detailed information was enough to make the person suing on it back off and the whole thing just kind of crumble and rebut it was this moment where it was so funny. I have been chasing this package of debt to, i am down in the courts in georgia, and the moment it comes under the faintest bit of scrutiny it vanishes into nothing. Host that is amazing. Well, you mentioned earlier that the hold chasing of paper and the Debt Collection business got to the largest height during the Great Recession because people simply had enough money to pay. They talk about the stronger economy for those people. Usually it is about had fallen to of hedge funds. The economy did something different. It is something that you discuss. Talk about where you think those people and how that is going to evolve going forward. I was in georgia looking at the lives of these dancers who basically were being sued in court trying to get a sense for what their lives were like. And one of them told me that she brought her car from a special car that offered catered almost exclusively to people with bad credit. So i went after this, and what became clear was that they were paying enormous premiums for bad credit bill in the words of this car dealer, their money is worth about 0. 70 on the dollar. A car that should have cost 9,000 cost 13,000. In fact, and other debtor i followed, he actually had his bank account cleaned out, one of these guys that there was a judgment, they found him, and cleaned out every cent he had in his savings accounts, which caused him to default on his car payment. Which then compromised his ability to get to work. His particular situation, he had a device, a gps device on the engine of his car to muscle the moment he went into default on his car on which he was paying his premium on, the engine shut off and his car a stock on the side of the road. One instance that is very logical that people say if i have not been hit we could negotiate. This is not under root financial stuff is there any understanding to get to that matter . From the Consumer Protection financial peril that is the branch not the brainchild of senator warren was a good move and theyre starting to make a difference in this space and then they will start Debt Collections. If i were in charge would give them more funding this will come down to how much resources they have to go after the bad actor. So the bureau may have the budget of 500 million but to put that into perspective would get the amount of money Jpmorgan Chase set aside for litigation reserve to defend themselves the budget is 2 percent of that. So you get the sense theyre doing good work but they are outgunned and hopefully i hope it is the call to arms to give them a shot in the arm of was on the phone with the Justice Department have an initiative called operation in chokepoint the idea is it is hard to go after the pay deventers the payday lenders so they go after the payment processors divide to bad stuff i still have to have the pavement processor to take your information and take of money and the Justice Department says a few deal with these lenders we will go after you. This of pushed back with a strong lobbying presence that pushes back but you need initiatives like that on a larger scale with the change that needs to happen to clean up that industry. And hopefully that is the catalyst how many years of research . I would say about four years. Host then you go back to buffalo with those individuals that were involved and see where they are from the most recent period of time. Was that . Guest the most surprising thing with the epilogue was what i found from theresa the former marine that paid the wrong collector that somehow got a hold of her debt. So i was curious how she was doing and just as the book was about to go final version she called me and said he will not believe this. But i just got a call from another collector on the same debt. Because when the Rightful Owner discovered there was fraud that he retire the debt and did the right thing he put into the hard drive and rest in peace but yet someone was collecting on the debt still. So i called the agency i wrote them of letter actually and i said i requiring about the calls youre sending to this woman because they would sue her what is your claim to ownership of this debt . I thought i would hear from someone like a chop shop but i talked to the owner Beverly Hills would ask them he said that we looked into this. This belongs to a portfolio of debt to purchase from a stock a stockbroker in florida said the numbers have been manipulated by his attitude was not