Assignment is the foundation of the debt-buying industry, and the industry is built on sand. Or a swamp. Because assignment is also the industry’s weak spot, and the reason why most—if not all—debt-buyer lawsuits should fail.
Debt buyers must prove they have the right to collect a debt. To do this, it must show an unbroken, valid chain of assignment back to the original creditor. Most debt buyers cannot do this.
Sometimes the court system actually works. The AP has an interesting article on homeowners who are forcing lenders to <gasp> produce the note—the proof the lender issued a mortgage. Apparently some people are having some success in delaying or stopping foreclosure by simply asking whomever is trying to foreclose to produce the original mortgage note. In these days of selling and reselling mortgages paperwork tends to get lost, so how does one prove they have the right to foreclose on anything?
I don’t know how good a strategy this really is and it likely would take a sympathetic judge, but hey it can’t hurt to ask!
National Arbitration Forum basically offers a rubber stamp to debt collectors already, and they argue that courts should turn their awards into court judgments without looking too closely.
Are courts unreasonably tossing out arbitration awards? Nope. NAF is just advocating for its clients, the debt collectors, who have no proof of the debts on which they are trying to collect.