This may be the case but it isn't what is going on here.

This initiative is buying distressed debt only, that is, the organisation who gave the loan has decided the cost of attempting to reclaim that loan or the chances of reclaiming a significant amount is futile. So they do sell the actual loan for cheap, to debt collectors, who employ more drastic measures than larger organisations want connected to them. (speculation, I'm not familiar with why these are more attractive to debt collectors).

Rolling Jubilee acts as the debt collector but doesn't collect, it buys the loan and cancels it. Then it hopes these people with cancelled debts, come back and donate a little, now that they have less burden.

That is the general idea, granted when people hear "loan", they think mortgage but this isn't the case here. Rolling Jubilee is unlikely (or never will) enter that area. They will be buying personal loans, medical loans etc. Smaller loans. It is already outlined how better performing loans, such as student loans, are off the table.

However from my understanding, it relies on the IRS remaining co-operative and for the regulations to stay within these bounds that keep it legal and charitable. So the cancelled loans are not counted as profit against Rolling Jubilee, at which point it all crumbles.

It has some merit but it also has a lot of downfalls and it also does jack shit to Wall St or banks, that is misdirected attention to garner support I gather.

(My understanding, could be incorrect)

P.S. Also it should be noted this is hardly for the 99%, it is for a much smaller percentage of the 99% who fail to pay their loans, good loans are not sold off. So really, this is the less troubled 99& bailing out the 99%'s further down on the scale. It basically boils down to a charity, it just abusing some loose regulations.

>> ^Edgeman2112:

Granted, I know little about this and someone please correct me if I'm wrong, but I'm pretty sure they're getting mortgages and mortgage-backed securities mixed up.
The mortgage is a loan. You owe 200,000 on the loan at 4% interest. This is debt.
The mortgage-backed security is a derivative; Theoretically it's a piece of paper whose value is derived based on that mortgage and the credit score associated with it. It's like stock in a company.
When they talk about doing away with debt, that's paying off the mortgage.
When they talk about buying 1,000,000$s worth of mortgages for 50,000$, they think they're also referring to the mortgage, but I'm pretty sure it's actually the leveraged mortgage-backed security. Buying those securities doesn't give you ownership of the loan. There is still 200,000$ that was lent by a bank out there. It doesn't just convert to 50,000$.