Drudge Retort: The Other Side of the News
Monday, June 19, 2017

More than a decade after Yvette Harris's 1997 Mitsubishi was repossessed, she is still paying off her car loan. She has no choice. Her auto lender took her to court and won the right to seize a portion of her income to cover her debt. The lender has so far been able to garnish $4,133 from her paychecks -- a drain that at one point forced Harris, a single mother who lives in the Bronx, to go on public assistance to support her two sons. ... Unable to recover the balance of the loans by repossessing and reselling the cars, some subprime lenders are aggressively suing borrowers to collect what remains -- even 13 years later.

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For example, the large subprime lender Credit Acceptance has filed more than 17,000 lawsuits against borrowers in New York alone since 2010, court records show. And debt buyers -- companies that scoop up huge numbers of soured loans for pennies on the dollar -- bring their own cases, breathing new life into old bills.

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It seems weird to me that you can hand your house keys back to the bank and walk away from the debt, but not in the case of a car.
I don't think you should be able to finance a car, trash it and then not pay off the loan.

#1 | Posted by bored at 2017-06-19 07:38 PM | Reply

It seems weird to me that you can hand your house keys back to the bank and walk away from the debt, but not in the case of a car.

There is no difference between the two. The right to recover the deficiency exists with any secured loan.

#2 | Posted by et_al at 2017-06-19 07:49 PM | Reply | Newsworthy 1

"I don't think you should be able to finance a car, trash it and then not pay off the loan."

That is not what this is about. This is about poor people desperate for a car who agree to loans that they can't afford at interest rates which prevent them from ever being able to pay off the debt. We need usury laws like we used to have. We need to repeal the bankruptcy law that prevents total discharge of debts which allows greedy corporations to keep collecting for years.

#3 | Posted by danni at 2017-06-19 07:51 PM | Reply | Newsworthy 1

"I don't think you should be able to finance a car, trash it and then not pay off the loan."

That is not what this is about. This is about poor people desperate for a car who agree to loans that they can't afford at interest rates which prevent them from ever being able to pay off the debt. We need usury laws like we used to have. We need to repeal the bankruptcy law that prevents total discharge of debts which allows greedy corporations to keep collecting for years.

#4 | Posted by danni at 2017-06-19 07:51 PM | Reply

Can't afford it? Don't buy it. Ride a bike, take a bus, whatever, but quit crying a river for people who buy things they can't afford. Damn greedy people who lend money and expect to be paid back, with interest. Question Danni. Do you refuse the interest your bank pays you on your savings and checking accounts & 401K accounts?

#5 | Posted by gracieamazed at 2017-06-19 08:22 PM | Reply | Funny: 2 | Newsworthy 3

the interest your bank pays you on your savings and checking accounts

A checking account with interest? Is it 1960 again?

#6 | Posted by REDIAL at 2017-06-19 08:26 PM | Reply | Newsworthy 1

Can't afford it? Don't buy it.
#5 | Posted by gracieamazed

Sure. If you're poor.

If you're rich, just get banks and investors to loan you their money, then when the business fails, declare bankruptcy and walk away richer than you started. Ask the president, he knows all about it.

#7 | Posted by SpeakSoftly at 2017-06-19 08:44 PM | Reply | Funny: 1 | Newsworthy 5


About five years ago I was reading how the banks were becoming super-aggressive hawking subprime auto loans to people who really could not afford them.

Because of the 2008 financial crisis that the banking industry caused, the were rules that prevented the banks from doing a similar thing again in the housing industry.

So the banks turned to the next largest consumer loan to exploit - auto loans.

We're starting to see the fallout.

#8 | Posted by LampLighter at 2017-06-19 09:08 PM | Reply | Newsworthy 3

Winners and losers, easy to spot them both. Yes, I get interest on both checking and savings accounts.

#9 | Posted by gracieamazed at 2017-06-19 09:20 PM | Reply

oops

the were rules -> there were rules

#10 | Posted by LampLighter at 2017-06-19 09:23 PM | Reply

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This seems to be an appropriate topic, so I'll ask a question ...

fmr Pres Obama put into effect a regulation of the financial industry that the financial advisors have the interests of the customer in mind when ~financial solutions~ are proposed to the customer. Prior to this regulation, as seen in the 2008 meltdown, financial institutions looked at the customer as a shill to be exploited (and apparently that has carried forward to subprime auto loans).

Recently, the Trump administration has made a big deal about the voiding of this regulation.

So I ask, how is this voiding of the regulation a benefit to the populace? Or is this new regulation mainly a benefit to the Goldman Sachs bankers that seem to populate the White House nowadays?

#11 | Posted by LampLighter at 2017-06-19 10:07 PM | Reply | Newsworthy 1

#2 what about non-recourse States?
www.financialsamurai.com

#12 | Posted by bored at 2017-06-19 11:07 PM | Reply

Whats wrong with that. They took the car but selling didn't get enough money to pay the balance of the loan so she has to pay that.
She borrowed the money she has to pay it off it doesn't matter what happens to the car.
There is a name for people like this.
She signed the loan she agreed to all this in writing.
Why didn't she buy a used car like other poor people do?
Stop blaming the bank because you destroyed the car and didn't pay back the loan.

#13 | Posted by tmaster at 2017-06-19 11:40 PM | Reply | Newsworthy 1

#2 what about non-recourse States?

From your link: If you live in one of the 12 "non-recourse" states ... Texas ... you are potentially in luck!

No such animal exists in Texas. I have prosecuted and defended many deficiency suits in the state. I'm gonna guess that general contract principles preclude the animal in the other listed states.

Generally, any debtor is liable for the amount of debt that exceeds the value of the collateral. Does the debtor have the money to cover the deficiency? Is it collectible? Maybe, maybe not. But the liability remains.

#14 | Posted by et_al at 2017-06-20 12:28 AM | Reply

Yes, I get interest on both checking and savings accounts.

Loving that .005% eh? That's not interest. That's a joke. Three (?) interest rate hikes recently and all credit cards announced corresponding rate hikes and yet every time the rate on my savings and checking has dropped each time. If you have a link to a better rate than 1.05% I would love to see it.

#15 | Posted by 726 at 2017-06-20 07:49 AM | Reply | Newsworthy 2

"Or is this new regulation mainly a benefit to the Goldman Sachs bankers that seem to populate the White House nowadays?"

That's what I see it as with regard to my IRAs. My current broker wants me to pay more in advisory fees than in the past and based on my trading history.....I would get little in return.

No...... it's a regulation that was bought and paid for by Wall Street.

#16 | Posted by eberly at 2017-06-20 08:04 AM | Reply

#11 | POSTED BY LAMPLIGHTER

You can't ask the question because you don't understand the question.

Have you tried to get a loan lately? It the last couple of years, this law all but shut down mortgage lending not because there is no money, but because of the bureaucratic nightmare this bill created. Trump is going after that part of it. Some mortgage brokers/lenders, the large ones, have tamed this beast, but the smaller ones can't handle the burden. Just another example of how the Obama Democrats punish small business.

#17 | Posted by LastAmerican at 2017-06-20 10:17 AM | Reply | Newsworthy 1

If you're rich, just get banks and investors to loan you their money, then when the business fails, declare bankruptcy and walk away richer than you started. Ask the president, he knows all about it.

#7 | POSTED BY SPEAKSOFTLY

For the rich it is just a Stategic Default. A risk that did not payoff. So they just walk away.

For the poor it is a moral deficiency. They deserve to be punished with being in debt forever.

#18 | Posted by donnerboy at 2017-06-20 11:07 AM | Reply | Newsworthy 1

"Loving that .005% eh? That's not interest. That's a joke."

In addition that interest is subject to being taxed. So effectively it is even less.

#19 | Posted by donnerboy at 2017-06-20 11:10 AM | Reply

How does the statute of limitations not apply in this case? The longest I've heard any state allow a debt to be collected is seven years. Most is three or less.

#20 | Posted by bocaink at 2017-06-20 11:26 AM | Reply

the interest your bank pays you on your savings and checking accounts

A checking account with interest? Is it 1960 again?

#6 | POSTED BY REDIAL AT 2017-06-19 08:26 PM | FLAG: | NEWSWORTHY 1

I earned a dollar or two on my savings account last year, which had an average balance of $20,000 or so. Oh, plus another 10 cents on my checking account.

Same bank charges me 18% interest on my credit card.

I think I'll put the earnings toward a new car!

#21 | Posted by cbob at 2017-06-20 12:37 PM | Reply | Funny: 2

In addition that interest is subject to being taxed. So effectively it is even less.
#19 | POSTED BY DONNERBOY AT 2017-06-20 11:10 AM | REPLY

The joke is on them, my interest amount is so low it doesn't get flagged by the IRS. Suckers!

#22 | Posted by bartimus at 2017-06-20 07:11 PM | Reply | Funny: 1

There is no difference between the two. The right to recover the deficiency exists with any secured loan.

#2 | POSTED BY ET_AL AT 2017-06-19 07:49 PM | FLAG: | NEWSWORTHY 1

if I hand the keys to my house back and the mortgage company sells for a surplus due to my mis fortune, do I get a refund?

#23 | Posted by lfthndthrds at 2017-06-20 10:29 PM | Reply | Newsworthy 1

Can't afford it? Don't buy it. Ride a bike, take a bus, whatever, but quit crying a river for people who buy things they can't afford. Damn greedy people who lend money and expect to be paid back, with interest. Question Danni. Do you refuse the interest your bank pays you on your savings and checking accounts & 401K accounts?

#5 | POSTED BY GRACIEAMAZED AT 2017-06-19 08:22 PM | FLAG: | FUNNY: 2 | NEWSWORTHY 3

Why can the banking industry trash their finances and get a bailout using my tax dollars? Its class warfare.

Goldman Sachs commited fraud and got a 5 billion dollar fine. why do they get to skate with some community beautification projects and no one has to sit in jail? class warfare?

its easy to pounce on the poor and let the rich skate.

#24 | Posted by lfthndthrds at 2017-06-20 10:32 PM | Reply

"but quit crying a river for people who buy things they can't afford"

I don't understand why you are so happy to have loan sharks preying on financially illiterate and irresponsible people.

You don't realize it, but you're making a "but did you see how she was dressed" argument.

#25 | Posted by snoofy at 2017-06-20 10:35 PM | Reply

My parents died last year. I had to probate since there was no will. My parents had a Toyota Camry financed through Toyota Motor credit. they owed a couple thousand on it. I called Toyota and turned it over to them. when we ran the ads in the paper for debtors to make a claim, Toyota claimed the full 10+ thousand dollars that they had financed on the vehicle. at the settlement of the estate I saw that and demanded the car back because we were essentially paying for the car we gave back... ---- the banks, they built this monster. thank goodness I had a good attorney and he forced them to make one of two choices, give the car back that they already sold or lower their claim to a couple thousand dollars

#26 | Posted by lfthndthrds at 2017-06-20 10:40 PM | Reply

Funny how when a poor person can't pay a loan for something, they take away the something AND make the person finish paying the loan, but if a Rich person can't pay a loan for their business they can say the business is in debt, not them and walk away without any obligations

#27 | Posted by hatter5183 at 2017-06-21 10:03 AM | Reply

"Question Danni. Do you refuse the interest your bank pays you on your savings and checking accounts & 401K accounts?"

Nope because I don't receive any interest, all my savings went to hospitals and doctors who successfully saved my daughter's life. BTW, have I mentioned that I hate our healthcare system in the United States and the bankers who keep it as a drain on people's savings. It is their way of making sure most people have no assets left by the time they die, this is the plan of the bankers who actually also are the insurance companies.
So basically Gracie, in answer to your question...--!

#28 | Posted by danni at 2017-06-21 10:16 AM | Reply

Winners and losers, easy to spot them both.

#9 | Posted by gracieamazed at 2017-06-19 09:20 PM | Reply | Flag:

Not so hard to spot the useful idiots eithers.

#29 | Posted by Sully at 2017-06-21 10:19 AM | Reply

I actually have mixed feelings about this. On the one hand, not everyone who defaults on these loans is desperate. And not all of them can't afford a car that they need to get to work. Many of them could afford a car but can't afford a car plus a ton of other crap they buy and don't need. And many such people when faced with a choice will skip on a mortgage payment or a car payment before allowing their credit cards to be frozen. On the other hand, the banks know who these people are when they are approving the loans. It is very easy to tell from a credit report who pays their bills and who does not and who is juggling multiple maxed out credit cards and alternating minimum payments from month to month. It is also easy to tell when someone is mending their ways and starting to clean their finances up.

You can't condone "responsibility" by advocating that a bad borrower be 100% responsible for his bad decision while absolving the banker of making the horrible decision to loan money to someone who obviously can't pay in the first place. It takes two to tango. And the high interest rates on these loans are justified by the risk. IMO, if the lender shouldn't be able to have it both ways. Either the loan is guaranteed or you can charge these people higher rates but not both.

#30 | Posted by Sully at 2017-06-21 10:32 AM | Reply

We live in a very fluid economy. Many of these people could afford the loan when they took it out but then something happened. illness, accident, job outsourced, furnace quit, etc

Also you have to realize that good sales people can be extremely persuasive.

The housing crisis was preceded by banks heavily advertising "buy for less than your rent payment"

Then when house prices did not keep rising the people were unable to refinance when the baloon payment came due and the dominoes fell

#31 | Posted by hatter5183 at 2017-06-21 11:45 AM | Reply

"You can't condone "responsibility" by advocating that a bad borrower be 100% responsible for his bad decision while absolving the banker of making the horrible decision to loan money to someone who obviously can't pay in the first place."

Oh, but they can.

The beatings will continue until moral improved.

#32 | Posted by snoofy at 2017-06-21 12:22 PM | Reply

Lets make it illegal for people with bad credit to have access to credit. Cash only! For their own good.

#33 | Posted by sitzkrieg at 2017-06-21 02:35 PM | Reply

Let's make ususy illegal again.

Getting rid of those laws is what caused all these problems in the first place.

I'm going way out on a limb and guess no Republicans or "libertarians" who aren't named Eberly are going to agree with me on that one.

#34 | Posted by snoofy at 2017-06-21 03:00 PM | Reply

what?

#35 | Posted by eberly at 2017-06-21 03:02 PM | Reply

can this car loan be discharged through bankruptcy protection?

#36 | Posted by eberly at 2017-06-21 03:25 PM | Reply

If a poor man takes a loan for $100 and skips on it and a rich man takes a loan for $100,000 and skips on it - isn't it considered income if the loaner forgives the debt? My buddy wasted his money gambling. When he lost his home to foreclosure, the house was sold, but it didn't cover the money he borrowed. They didn't go after him, but he got a note from the bank stating the unrecovered money was income. His tax bracket jumped when he had to include tens of thousands of dollars as income. He thought that sucked.

#37 | Posted by Petrous at 2017-06-21 03:39 PM | Reply

Have you tried to get a loan lately? It the last couple of years, this law all but shut down mortgage lending not because there is no money, but because of the bureaucratic nightmare this bill created

You are so full of it I'll assume your eyes are brown. I get crap daily trying to get me to refinance. I work with builders and my company, one of 3 in the area, has done 35 startups for new homes this week, and we will crack 50 by end of day Friday. Sure is a crap load of new construction going on if people can't get mortgages. 75% of the startups I do the home is sold before construction is completed. I am simply amazed that so many people in my market can come up with 300-500k cash.

#38 | Posted by TaoWarrior at 2017-06-21 03:44 PM | Reply | Newsworthy 1

not nearly as easily as it used to be. Consumer debt is much harder to discharge now.

#39 | Posted by hatter5183 at 2017-06-21 06:02 PM | Reply

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