After some further research into my post Another Bank Loophole?, I found out what the deal is with Collection Agencies buying up 2nd mortgages. It turns out that Collection Agencies can legally garnish wages if they want to pursue a debt. So I guess it would make perfect sense for these companies to buy notes at .30 on the dollar and go after the homeowners wages. Apparently this is a very lucrative business that I was not aware of. I can see how banks would rather do this over taking a lesser dollar amount at closing to settle the account. Hopefully this won’t become the norm. Remember, we are trying to help people, not draw blood from a stone.
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This is a shocking trend that could compound the problems of already beleaguered home owners. I do hope that this will not become a trend however I fear that it will.