Household HSBC Watch

What happens to the debt itself, as National Loan Exchange President Dave Ludwig has demonstrated, is a story in and of itself. Unpaid debt has become a commodity, creating revenue streams for banks trying to recoup their losses without devoting time and energy to expensive debt collection. Following the savings and loan crises of the late 1980s and early 1990s, Ludwig and several partners pioneered the business of loan brokering, selling millions in unpaid loans, often for five to 10 cents on the dollar, to buyers, usually collection agencies, who then try to collect some of the debt. NLEX has sold more than $50 billion of debt, especially credit card debt.

Ludwig’s newest employee (his firm employs 12 people), Aaron Hadam, was department manager of Asset Recovery for HSBC Auto Finance. Regarding unpaid debts, it was collection agencies that banks hired who actually engaged in unethical practices, leading to a class action lawsuit and the passage of the Fair Debt Collection Act.