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Charg-off acct. when creditor has insurance

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I have been searching answers to this question and have only found someinformation on Neil Garfield's site in his arguments against foreclosures: that the original lender took out insurance (add co-obligors to the note) after the origination of the promissory note and has reimbursment from the policy when default happens. His argument is that the note is paid in full for the 2nd time (1st time after the note sells on the secondary market for more than face value) but the reimbursment from an undisclosed insurance policy, why are they trying to take the property also. I am trying to figure out the same answer for credit card debt, etc: If the lender gets reimbursment from an insurance policy, why is a 3rd party trying to collect on a charged off debt and how can they have legal authority?

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