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OWS branded outfit buys 15M private debt for 400k.

From the Guardian

My take: This is a setup. Even if it wasn't it doesn't help anyone except those who buy distressed debt.

First off it doesn't really help those with the debt. If they had any chance of paying they would have. Their credit ratings are already as shot as they could be. Buying this out doesn't do anything except save them from going through bankruptcy, which if they are this bad off they should do anyway and clear all possible debt.

So if you're someone with cash to buy distressed debt who has access to some well intentioned by economically naive OWS types, you can make a bundle buying up the target debt, and then getting the useful idiots to ask other lefty suckers to contribute and buy it from you.

Bam you just turned a profit risk free using the money of well intentioned rubes.

If correct, and I bet money it is, (how else do fleabaggers get 400k?) this is a perfect example of how economic ignorance and naivete makes you a perfect victim for the very forces you claim to oppose.

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This is pathetic, you are

This is pathetic, you are attacking a non-profit organization that is using DONATED funds to help people who have too much MEDICAL DEBT. How deep does your baseless paranoia go?

It doesn't help those with debt? Are you kidding? In what world does forgiving a debt that is ruining someone a bad thing??

Instead of forcing people to go through a bankruptcy procedure, involving lawyers and other expenses, these people suddenly can concentrate on paying for things that are crucial to their survival, food, housing, etc.

"My take: This is a setup. Even if it wasn't it doesn't help anyone except those who buy distressed debt."

Your take is absolutely, 100% wrong.

"Lighthouses are more useful than churches."- Ben Franklin
"Religious bondage shackles and debilitates the mind and unfits it for every noble enterprise."- James Madison

meekandmild's picture

volunteers can't collect on alleged "bad debt"

A volunteer, stranger, or intermeddler is "one who thrusts himself into a situation on his own initiative and not one who becomes a party to a transaction upon the urgent petition of a person who is vitally interested, and whose rights would be sacrificed did he no respond to the importunate appeal ."Laffranchini, 39 Nev. 48, 153 P. at 252.

Parties may be considered volunteers if, in making a payment, they have no interest of their own to protect, they act without any obligation, legal or moral, and they act without being requested to do soby the person liable on the original obligation. Henningsen v. United States Fidelity Guar. Co., 208 U.S. 404, 411 (1908); Smith v. State Sav. & Loan Ass'n, 175 Cal. App. 3d 1092, 1098, 223 Cal. Rptr. 298, 301 (1986); Norfolk & Dedham Fire Ins. Co. v. Aetna Casualty & Surety Co., 132 Vt. 341, 344, 318 A.2d 659, 661 (1974).

Dig deeper.

This is a non-profit organization with no payroll and all services provided pro bono. They are concentrating on unsecured debt, specifically defaulted medical debt in the secondary market.

I'm sure their donors think they are contributing to the truly needy in our society, but dig a little deeper.

You can't easily get out of student loans since they are guaranteed by the Fed Govt.

A secured loan, such as a car or home is non recourse, so you can walk away and experience only the damage of a default on your credit rating.

If a person is far underwater overall, bankruptcy will discharge all but student loans, IRS liens and criminal judgments.

When I dug deeper, I realized this organization is helping people who have at least a decent net worth and probably some decent equity in their homes. If they had little or no net worth, they would file bankruptcy to discharge unsecured, dischargeable debts.

I get the idea that some of the beneficiaries of this program may have a greater net worth than some of the donors.

Dost mine eyes deceive me?

OWS is solving debt with private action while DailyPaulers are advocating bankruptcy, a government program, as better policy.

Wow, 2013.

Exactly, or even be some of the donors

One way or another, this stinks of insider ARRRRRBITRAGE:)

Proof will be if they don't get investigated. Because if the regulators were legit, which they are not, they would be all over this one.

"Fleabaggers"? "Lefty suckers"?

Though OWS people might disagree with you on the solutions to our problems, there's almost certainly agreement on where the problems lie... so using these epithets to describe your fellow activists is foolish and destructive. In fact, in New York more than a third of those polled at the initial New York OWS protests in 2010 mentioned they'd be voting for Ron Paul. Does that fit into the narrative your cable TV handed you?

This is how the MSM destroys populist movements: divide and conquer. MSNBC tells its flock about racist teabaggers, and Faux News tells its retirement home audience about the OWS' shaggy hippies. Do you like it when the MSM call you a "teabagger"? No? Then wise up and have some fucking respect for other activists that happen to lie on sections of the entirely made-up political spectrum that you don't happen to approve of.

Those "fleabaggers" you speak of have been acting locally in several states to help foreclosed people reclaim their homes. Wise up and drop the needless divisive bullshit.

Dude I call myself a

Dude I call myself a teabagger in a post the other day. And I have worked with OWS people. Chill out.

I agree OWS sees part of the problem. I think many of them are well intentioned. But this episode is just an illustration of how misguided they are.

Put simply, until you understand economics, you are in the matrix fighting against those trying to free you from it. Fighting, in fact, to remain a slave.

To mix cinematic references, OWS are all boromirs.

They think two very wrong things.

1) They will ever have the ring of power. They won't.
2) If they did, they would not be just as corrupt. They would.

The ring is democracy. So long as the ring exists, it will enslave. It is not who controls the ring that makes it evil. It is the ring.

There is little more frustrating than slaves fighting to remain slaves. So hopefully you will forgive some of us for expressing it.

EDIT: You got downvoted so I upvoted you. You don't know my context so your ire with me, while perhaps a bit of an overreaction, isn't completely unreasonable.

It's one thing for you to accept the name "teabagger"

And in doing so you should be aware that this title is one the media have applied spitefully. If you want to embrace the term, that's your call. But you should not assume others are called "lefty suckers" any more than you should be OK with getting called a bigot for being a self-identified "teabagger". And if you really have worked with these people, I find it very strange that you would refer to them so disrespectfully.

Occupy actually has had far more of an effect than the Tea Party. The Tea Party was disabled in its infancy. Occupy, on the other hand, was seen as a much more severe threat that needed to be disabled very quickly. Obama even adapted the 99% rhetoric, though it was only lip service, of course.

Also, if OWS' policies only supported the institutions they oppose, then why did said institutions employ third parties that contemplated assassinating occupy protesters with sniper fire?

Why did the NYPD, at behest of banks, care enough to track protesters out-of-state?

The ring is democracy. So long as the ring exists, it will enslave. It is not who controls the ring that makes it evil. It is the ring.

Oh, then you hate democracy / the will of your fellow man. good to know. I can't help but wonder, then, why you're here.

The problem isn't government. The problem is a government that is not controlled by its people, but only moneyed institutions. It IS possible to have a government that represents its people; this sort of thing is what the Reagan administration, at the behest of corporations, tried so hard to destroy during its campaigns of central american genocide.

Need a lesson in balance sheets first

I understand the frustration with political groups who get co-opted by special interests of the left, right, pundits and politicians. E.G OWS
the nature of buying your own debts is something I have professed should be the basis of a class action suit against the monopoly of the mortgage clearing houses.

If OWS found a way to break the banking monopoly by forcing or tricking the banks into allowing them the right to buy a block of debt... well, I am jealous. Most people think banking mortgages are simple contracts of a fixed value. I.E. that your mortgage is worth what you have left to pay on it.

Nothing is farther from the truth!

The bank balance sheet and the debt are graded. If a bank has a bunch of debts with deadbeats at too low of an interest rate for the grade of debt then they are motivated to take the loss and move the debt for whatever price they can get.

With a fixed interest loan that is not backed by 80% of an asset's value, and being paid late the price can be less than half. If it is 60 days + late and the loan is over 100% of value (upside down) the loan can be bought for 5-7% or even less.

Following me? This improves the bank balance sheet and thus they can attract better investors (stock prices) and they get better bank-to-bank rates, window privileges, etc. ALL FAR MORE VALUABLE THAN THE LOANS THEY ISSUED WITH FRACTIONAL RESERVES.

So yes, when your loan was bought by a new servicer ask yourself if you had used a grace period, were late, late 30+, 60+ and if the new servicer is actually doing so for FANNIE MAE. These loans could have been bought for less than 1% of what you owe. ...AND YOU DON'T HAVE THE FIRST RIGHT OF REFUSAL NOR THE RIGHT TO NEGOTIATE THAT INTO YOUR LOAN! Pis sed off yet?

So when you see that OWS bought $15,000,000 in debt for $400,000, you are witnessing a purchase of $37.50 for one dollar. i.e. $375,000 mortgage for $10,000. ..<<<< 2-2/3% >>>> I could definitely come up with $10k if I was buying off my own $375,000 mortgage that I was paying $2700 a month on.

But alas we must all have a standardized mortgage terms that prevent the owner from the right to buy his own mortgage for the same price the market delivers. Welcome to the US government established banking monopoly.

I hope that clears things up for people.

Right, which is why the scam

Right, which is why the scam works. If OWS could give people money to buy their own debt, that would be nice, but then I don't think they would have gotten 400k to do it. And it still would have been a scam, just less of one.

It's an arbitrage scheme like all the others. They create laws and regulations and licensing so only certain people can buy and sell certain products. Then those people are in a position to collect rent on the exchange.

Legitimate free market arbitrage captures geographical and temporal transport costs, like shlepping silk between Asia and India. With the modern miracle of fascism we just invent legislative walls between markets so anyone connected can profit!

So back to the scam, let's say that this is all speculator money, though I'm sure they got some actual rubes to cough up. In order to profit, they only had to make a 3% spread from the purchase of distressed debt to the sale to the OWS.

The reason distressed debt is cheap is because you don't know if you will be able to recover or unload. But with a front like this you can guarantee you can flip the paper and quick.

On top of that, this scam either operates as a non-profit, in which case all the 'donations' are deductible or..

Possibly even better yet, for profit, because then they can probably write off the entire 400k as a loss, if the chain of ownership can be obscured back to the same speculators who fronted the 400k, you're looking pretty damned golden.

Sure this is small potatoes, but it's a perfect example of how those claiming to 'help' the 'little guy' are always scerwing them.

It is a nonprofit.

I don't know the motives

But you hit on the question. Is it a for-profit entity that organized where the investors each contributed 2.6% of their mortgage/debt and then received the mortgage once the purchase was complete?

I hate the fact that our country is all about pay offs to the minority voices as those who try to play fair at best get no deals... at worst pay for everyone else.

However, it sure seems like we could get some traction in fairness if the story got out that they used their anti-bank movement as a form of extortion!! All I want is the right of first refusal to the sale price of my mortgage. If we could force the right retroactively then we would be able to compensate the current owner for what they paid. They wouldn't get hurt as we have been paying installments on the original amount. Sure that smarts, but I am willing to draw a line in the sand if it means buying my mortgage for $500.

I do not disagree in any way.

I do not disagree in any way. The system is rigged by the mechanism that people think will 'help' them.

There is only one true function of the state. To protect capital from the market. Without the government the most brilliant entrepreneur will have his wealth dissipated in a generation or two. Wealth is heritable, but business acumen almost never is. It's an unavoidable consequence of the fact we want to make our childrens' lives better, but giving them things makes it almost impossible to learn to be a good businessman. So to protect your child from the consequences of his own control of the capital, you buy from the government regulations that make it difficult or impossible for new competition.

Maintaining capital accumulations is hard in the free market. You have to provide a better product than everyone else. So the function of the state is to provide laws to protect that capital.

All the regulations and taxes that OWS thinks 'stick it' to the corporations merely act to ensure their perpetual dominance and insulation from market forces. (tangentially this also keeps wages down, as these barriers to market entry mean fewer employers to bid up wages)

OWS is supporting the forces that enslave them.

This is what democracy looks like.

Central banks are the engine of fascism.

Democracy is the fuel that runs it.

Sadly the OWS crowd calls for more of the same.