New York Attorney General Schneiderman has set
his sights on the NCT (National Collegiate Trust)
vulture. Can you find it in the picture?
Stacy Cowley in the New York TImes:
National Collegiate’s trusts have aggressively pursued in court borrowers who fall behind on their student loan payments. An article this week in The New York Times drew attention to the trusts’ inability in many of those lawsuits to produce the paperwork needed to prove that the trusts own the debts they seek to collect. Judges around the country have dismissed dozens of cases filed by National Collegiate’s trusts because of flawed or missing paperwork.
My Experience With NCT
I have handled dozens of NCT cases now, with varying results.
One judge denied 9 NCT summary judgment motions in lawsuits against two of my clients, then changed his mind and granted them judgment.
Another Judge in another court granted their motion without even allowing me to depose a witness.
Conversely, NCT unilaterally dismissed one lawsuit before my answer to their motion was due.
And, this month, I got them to dismiss suits for $178,000 against one of my clients, as they could never produce a witness for us to depose about what their “records” mean.
I have settled a bunch of other NCT suits for about 35% of what is, allegedly, owed.
The 800,000 private student loans that National Collegiate owns, totaling more than $12 billion, were originated a decade or more ago by other lenders, then packaged into securities and sold to investors. As the debt changed hands, crucial paperwork documenting the loans’ ownership appears to have been lost, according to court filings in a bitter legal fight among parties involved in operating the trusts.
Default Judgment Business Model
NCT gives its lawyers very little, and its strategy is based on people NOT getting lawyers and fighting the lawsuits.
NCT gets a default judgment if no response is filed, which is true in, my guess, over 90% of the suits they file.
Donald Uderitz, the beneficial owner of National Collegiate’s trusts, said he had just received the subpoena and had not yet reviewed it.
“Right now, all I can say is given the issues we know we are dealing with, I’m not surprised and I don’t expect this to be the last state attorney general to look into this,” Mr. Uderitz said by email.
Mr. Uderitz has said that he has concerns about the trusts’ ownership paperwork and wants the lawsuits against borrowers to stop until he can more thoroughly investigate the collection problems. A continuing legal dispute between his company, the Vantage Capital Group, and others involved in the trusts has prevented him from making any changes to the trusts’ operations, he has said.
It seems NCT is not happy with the other companies that create the records, as I have yet to find a real, live NCT employee.
Do not make the mistake of not responding to an NCT, or any other lawsuit.