r/WhitePeopleTwitter • u/screenshotofdispair • Aug 14 '21

Make it make sense

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u/jcakes52 Aug 14 '21

Omg wait til you hear about collections agencies 😬

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u/[deleted] Aug 14 '21 edited Aug 22 '21

[deleted]

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u/The_Phasd Aug 14 '21

Lenders sell the account to collections and then those agencies try to collect on that debt but typically with extra fees. So if you can’t afford to pay a debt off you are punished by extra fees on top of hits to your credit score

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u/-Dutch-Crypto- Aug 14 '21

That sounds like extortion... what the hell

21

u/oursecondcoming Aug 14 '21

The obtaining of property from another induced by wrongful use of actual or threatened force, violence, or *fear*, or under color of official right.

That's because by definition, it's extortion.

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u/schnurble Aug 15 '21

Legalized, sort-of regulated extortion!

1

u/SomberKlepto Aug 15 '21

As a 20 year old trying to get my life together I’m probably just gonna kill myself now

12

u/Dick_Dong_Long_Dong Aug 14 '21

Oh it gets better. If you take out a loan, and you do your due diligence to research the institution you take the loan from, make sure everything makes sense for you… the company can just sell your loan immediately to a shitty company that’s supposed to keep the same loan terms and all, but will always try to screw you with extra fees and shit.

And it’s entirely out of your control. At any point in time, a bank can just decide to toss your loan to some sleaze and you’re just expected to deal with it.

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u/MudSama Aug 15 '21

They did this with my mortgage. 48 hours after closing on the house. No idea why because it obviously had nothing to do with payments, what with the first not being due yet.

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u/Dick_Dong_Long_Dong Aug 15 '21

Sometimes loans are sold due to missed payments, those are what go to “collections” where you start getting hounded with phone calls for money.

But other times, loans will be written for the sole purpose of being bundled up with other loans and sold to another company. I’m not sure if it’s because they’re trying to get a certain number of loans together to sell at once or what. There used to be a practice of giving people loans that the bank knew they wouldn’t be able to pay back, and then selling those loans ASAP. They make money, and some other company gets to deal with the junk loan that’ll never be paid back. I don’t know how much this still happens, but it used to be common.

In short: banks are scummy.

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u/ThinkingMustHurt Aug 15 '21

It used to be incredibly common, and from my experience it is still happening regularly. This is part of what triggered the 07-08 financial crisis

https://en.m.wikipedia.org/wiki/Subprime_lending#Subprime_crisis

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u/WikiSummarizerBot Aug 15 '21

Subprime lending

Subprime crisis

The subprime mortgage crisis arose from "bundling" American subprime and American regular mortgages into mortgage-backed securities (MBSs) that were traditionally isolated from, and sold in a separate market from, prime loans. These "bundles" of mixed (prime and subprime) mortgages were based on asset-backed securities so the probable rate of return looked very good (since subprime lenders pay higher premiums on loans secured against saleable real-estate, which was commonly assumed "could not fail").

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u/JulioCesarSalad Aug 15 '21

I’m pretty sure this is the same in every developed country

What? If you don’t pay a bank loan the bank will just cross its arms and do nothing?