The entity, which bought private student loans, made a deal
with the CPFB (Consumer Protection Finance Bureau) last
week, which is being challenged.
Which Entity Owns the Student Loans?
This is the problem NCT has had, and I have successfully defendant some of their student loan lawsuits because they could not prove that the NCT trust (there are over a dozen of them) suing my client, actually owned the student loan that was the subject of the debt.
The suing trust hires a law firm, which can usually produce loan documents signed by my client, but, with a bank, the original student loan lender.
There follows a series of documents and affidavits, which never say that my client’s student loan was in the batch, or, group of batches, of student loans mentioned in the documents.
I say, groups of batches, because I have seen up to 48 different categories of loans in an exhibit to a exhibit of student loans purchased.
Some judges have accepted this, well, stuff, as sufficient, and ruled against my client.
They top it off with an affidavit from someone who works for TransWorld, which just collects stuff created by other entities. Allegedly.
Their affidavit says, I deal with these sorts of documents all the time, and these are exactly the sort of documents with which I deal.
An affidavit is supposed to be of personal knowledge, not what someone else told you. That is hearsay.
Which Entity Made The Student Loan Deal With The CPFB?
This is hard for me to follow, but, from the Shahien Nasiripour Bloomberg story:
In September, the regulator and Florida-based Vantage Capital Group LLC, which controls the National Collegiate trusts, hammered out a settlement by agreeing to a third-party audit of the more than 800,000 loans that have been held by the 15 vehicles. The audit would enable Vantage to find out which loans it can really pursue and which loans it can’t. While the audit proceeds, all payments to investors in securities based on those loans would be placed into escrow. The proposed deal also calls for $19 million in fines and restitution for thousands of borrowers sued by debt collectors.
However, here is where some of these other entities come in.
The 15 vehicles that make up the National Collegiate trusts, along with the loan servicers, insurers, banks, hedge funds, and debt collectors with a stake in its operations, would be required to foot the bill for the audit and settlement—under a deal they didn’t approve. And if the audit reveals widespread wrongdoing, the price tag could climb sharply, according to court papers. Unsurprisingly, they cried foul.
All told, investors holding some $1.4 billion in NCSLT notes asked U.S. District Judge Gregory Sleet in Wilmington, Delaware, to reject the accord, saying Vantage doesn’t have the power to negotiate on their behalf. Loan insurer Ambac Financial Group Inc. and debt collector Transworld Systems Inc. said the deal mandates changes to how trusts operate that would violate decade-old contracts.
OK, I admit. I don’t get it.
If Vantage controls the NCT entities, how come these other guys get to say anything?
If it does not, how does it get to agree that they fork over $19 million plus of their dollars?
Read the whole thing, I will be following this story.
And contact me if you have NCT, or any, student loan questions.