In New York, unlike some other states, the law permits liberal use in business lending of a device called confession of judgment, in which borrowers “sign a statement giving up their right to defend themselves if the lender takes them to court.” Among the consequences: the lender may hold the wherewithal to seize the borrower’s assets unilaterally upon filing affidavits. Following the growth of lenders who advance cash to small businesses at extremely high interest rates, tens of thousands of business borrowers have experienced enforcement actions, often filed in upstate New York counties with little connection to either lender or borrower. Sharp practices? “In dozens of interviews and court pleadings, borrowers describe lenders who’ve forged documents, lied about how much they were owed, or fabricated defaults out of thin air.” [Zachary R. Mider and Zeke Faux, Bloomberg, in what is billed as the first of a series on the merchant cash advance industry] More: Scott Greenfield.
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If the lenders take things based on forged documents, then that is a crime, and the criminal law should provide a remedy.
The problem, it seems to me, is that the powers that be don’t seem to think that these sorts of things are crimes. Take the Wells Fargo repossessions based on phantom debts on force-placed insurance. Why wasn’t anyone charged with car-theft? Why didn’t the consumer advocates tell people whose car was wrongfully repossessed at the behest of Wells Fargo to swear out a criminal complaint? Obviously, the repo man was just doing his job, but the employee at Wells Fargo who created the fake account should be haled into some local court and prosecuted.
The other problem with Wells Fargo’s practices–in a society with armed people, repos based on fraud may be met, justifiably, with force. The people who did these things are criminals and put people’s lives and safety at risk.
I dare any lawyer to look at foreclosure cases for the past 10 years. Actually, law schools should take this on. Fraudulent docs everywhere. Robo signed (forged) assignments. Entities allowed to foreclose without standing. Homeowners steered into default by ‘lenders’ advising them they had to be 90 days in arrears to qualify for HAMP.
18 million foreclosures, most CAUSED by the pretender lenders.
Jail the bankers.
Unconscionable contracts seems to be the flavor of the day. I’ve read some horrible contracts that are issued to desperate people who are trying to support their families, develop businesses just to get a leg up.
The American dream has become the American nightmare as lenders and businesses have been allowed to run amok.
We have become the England our forefathers sought to escape….and justice is slowing being taken from us.
Sad. There will be a price to pay.