Posted: October 7th, 2012 by Militant Libertarian
The National Bank of Canada is attempting to foreclose upon hundreds of American families’ homes in California over old credit card debts, according to a published report.
Bay Citizen reporter Rick Jurgens writes that the bank’s debt collection unit, Credigy Receivables, began filing foreclosure lawsuits recently that take advantage of a loophole in California’s laws that lets them go directly for a debtor’s home even if that property was not offered as collateral for a loan.
Jurgens explained that one of the people targeted by the new legal tactic is 71-year-old Helen Jones, an Oakland resident who lived in her home for 37 years before Credigy sued in 2010 over $1,636 in credit card debt her ex-husband ran up. She claimed the bank offered to settle the debt and drop the foreclosure for $7,000, and that she ultimately paid them $3,800 just to get it all over with.
They can get away with this because California has left the relatively new practice of third parties buying and selling debts virtually unregulated, creating legal space that lets banks go directly after valuable assets that were never offered as security for loans.