Hundreds of California residents are being threatened with foreclosure by a major Canadian bank, but it has nothing to do with missing their home payments. Credigy Receivables, which is part of the National Bank of Canada, is taking advantage of some of the lax debt collection laws in the Golden State that could potentially allow the bank to take away the residences of those unwilling or unable to pay off their credit card debt.

The Bay Citizen:

Little-noticed except by debtors and consumer attorneys, Credigy’s unusual collection efforts begin with the purchase of judgment liens issued in California lawsuits filed by credit card lenders and other unsecured creditors. Credigy then names debtors who own residential properties as defendants in foreclosure lawsuits.

…The company’s tactic – which consumer advocates say is designed to intimidate debtors – has sparked outrage. Paul Leonard, director of the California office of the Center for Responsible Lending, a consumer advocacy group, called Credigy’s targeting of the homes of alleged debtors “totally reprehensible.”

The threat of foreclosure can blindside a consumer who decided against risking his or her house by borrowing against home equity and instead used a credit card. Credigy’s strategy takes aim at the homes of consumers who took out unsecured loans, like credit cards, which are generally more expensive.

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