Treasury Secretary Henry Paulson was asked by a reporter during the Sept 2008 bombshell announcement hearing, where the current era of bank bailouts was born, whether the foreign buyers of our nation’s debt had contacted him to express their frustration in the quality of the debt and the debt reporting. Paulson did not respond but China and Japan and others placed a moratorium on such debt purchases resulting in our banks holding troubled assets. Similar to this mortgage info processing problem is what occurs with landlords of commercial or residential properties who use software programs to account for rent collections. The program automatically sends notices to network attorneys and generates pro forma letters sometimes to the wrong tenant. If a rent payment is processed to the wrong account, automatic triggers for late fees or interest result in an accounting nightmare for which manual overrides often do not exist. And when the tenant’s lawyer asks for the accounting, the landlord’s lawyer cringes and sometimes yells back. Hmm, isn’t this also similar to credit card or private loan servicers and collection firms except that these companies also use software programs that match debt to similar names in their database if they can not locate the name on the original account. People start getting notices of or suits for debt owed for accounts that are not his or hers. If they do not act quickly, judgments start getting entered against them. But when they do hire lawyers early enough, you can get to bankruptcy Court and hear Judges yell at the collection lawyer to correct their systems. While I do not always believe my client’s account of his or her mortgage payment history, this Judge illuminates the misinformation problems that are becoming all to routine in a number of industries.
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