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Beware "predatory loans"

by Angeline Booher / October 10, 2005 6:24 AM PDT

Yesterday I watched a TV story about "predatory loans". (I can't recall which channel, so I don't have a link).

Included in the list was stuff like getting a loan on a tax refund before it arrives, check cashing businesses, 0% mortgages, interest being raised on a mortgage when the contract did not state the lender could at its discretion, penalties for paying off a loan early, and some others.

The caveat was 'If it sounds too good, it is!"

I know I see TV ads that target those with poor credit for car loans, and zillions of ads encouraging refinancing a home "to consolidate your bills" or "take a vacation", etc.

Here is an older story:

http://www.cnn.com/2005/POLITICS/08/19/predatory.lending/index.html

There is now legislation on Capitol Hill.

Angeline
Speakeasy Moderator
click here to email
semods4@yahoo.com

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Some of the commercials from these places
by Steven Haninger / October 10, 2005 8:10 AM PDT

are unbelievable. One has been on the radio here recently (Patriot Financial) featuring a banter between what sounds like a young man and young woman both discussing their credit problems. The young woman claims she's about to file bankruptcy but the young man tells her about the great loan he got from Patriot and she should give them a call. He says that 'even with my bad credit history they loaned me enough to pay all my debts and gave me enough cash for this new boat!'....Good grief folks, what sort of responsible person in financial trouble buys a new boat? All of this money, of course, is tied to ones home equity, of course. Me thinks what these financial institutions are after is real estate. They want to take your house. Can people really be that stupid to fall for this?

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Please government get out of our way!
by Evie / October 10, 2005 8:40 AM PDT

I'm sorry but it is because of "predatory lenders" that many are able make ends meet when they don't have any family members/friends to turn to in a pinch and find themselves in a bind. Poor people aren't stupid and the terms of any loan are made PLAIN and CLEAR before you sign (and sign and sign ...) on the dotted line.

Evie Happy

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Car title loans in Georgia...
by J. Vega / October 10, 2005 1:11 PM PDT

Evie, do you know what the APR for a "car title loan" is in Georgia? 300%. And guess what, if the borrower defaults the lender can immediately sieze and sell the car. Then it gets really nasty, the lender keeps 100% of the sale proceeds. I'd say that predatory fits as a description.

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Vs the alternative, however
by Evie / October 10, 2005 8:03 PM PDT

Someone that takes out such a car title loan is usually in desparate need of the money. Would you prefer their only option be a loan shark? Pawn shops provide a valuable outlet for many as well. Do we need Congress outlawing these folks too?

Evie Happy

p.s. If it's to buy drugs the person doesn't need the car anyway Devil

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Agree and disagree
by Steven Haninger / October 10, 2005 9:11 PM PDT

People can be both unfortunate and irresponsible and either can get them into financial trouble. Some make a living off of peoples desperation. Certainly there is a place for that but it must be done within reason. I am not in favor of governments being a first line regulatory establishment but perhaps they can establish lines that are not to be crossed. It does not matter how a person gets in a financial bind or how he/she handles it. If the end result/gamble is that they fall totally destitute, we need to decide just how generous our society is going to be in rescuing them....and too often, it's not just the individual breadwinners that are affected but entire families of people who are innocent. Their care falls upon others while the lender might just own their home, car, and/or whatever collateral secured the loan. If we (the public) acquire the care of all the financially lost souls out there, we may have just (in some way) paid for another type of abuse as well...those who engage in usury and other questionably ethical practices.

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agree and disagree
by marinetbryant / October 10, 2005 10:08 PM PDT
In reply to: Agree and disagree

There should be a national usury law. After the passage of the new bankruptcy bill it will be harder for those unfortunate (irresposible) people to get debt relief. What's with everyone and their brother offering credit cards with low introductory apr's and then jumping to 21-24%? The government should jump in on this as well as oil windfall profits. If you win the lottery you will pay federal and state taxes!

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Not that I would have wanted to live then
by Steven Haninger / October 10, 2005 11:16 PM PDT
In reply to: agree and disagree

but there was a time when prisons were for debtors and not criminals. Criminals were punished almost immediately upon conviction and within public view. Debtors had to "work off" what they owed. How this was accomplished I do not know. I'm not sure that irresponsible financial behavior isn't really some sort of theft....it's that these folks just take a small chunk from a lot of people rather than a large chunk from a few...and then they blame others for their woes. Sometimes it's not easy to separate the truely unfortunate from those who made their own bed. Maybe that's where the line needs to be drawn but I suspect the line would be a wavy rather than straight one so no one wants to do get out the chalk.

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We had a usery law....
by Angeline Booher / October 11, 2005 1:22 AM PDT

..... enacted back when we had businesses that specialized in personal loans.

We also had a state law capping credit card interest rates. (I think it was 10%). Then the banks started a campaign to change the law. Scare tactics were used... " It will be impossible for most people to get a credit card" "it will result in high unemployment because (gobbledygoop)", "we will have to lay off employees" , "New businesses won't come here any more" (but never said why) on and on.

This is true-.... my husband was Officer of the Election and I was a registrar at out precinct. We caught more than one "voter" that tried to use a former address though they now lived in an adjoining count. It turned out that ALL of them has legitimately voted where they should have, but were sent by their banks to vote in ours.

Anyway, the banks won.

Now, I understand that using a credit card = taking out loans. And I know that there are too many who use them irresponsibly. But as was pointed out, people are deluged with credit card offers. I cannot see having more than one for personal use, excepting, perhaps, a gasoline one, and maybe for department stores.

My son started a "pass book" savings account when he started working at age 16 in the summers to save for college. He continued to work summers during college until into his senior year, so was only making withdrawals. (I did that for him, and sent him the money. I also opened all of the statements from the bank.) Suddenly the statements stopped. When he later went to close the account, there was no balance. "You did not make any deposits, so we charged you a fee every month." Did they ever! We knew there was a dollar per month for a statement. But nowhere was there any notice of exorbitant fees for no deposits. (They also had continued to charge the expected dollar a month.) No notices of change in policy had been sent. By our accounting, there should have been about a $150 balance. We changed banks.

When it became available, we used electronic transfer to make our mortgage payments. Within a few years, it came down to what we thought was the last payment. Wow! But after a few weeks, we got in the mail-not the papers we expected, but a warning we would face foreclosure if the last payment, plus a hefty penalty, was not paid by such and such a date. I hightailed it to the bank. The manager there was also upset. She phoned the home office, and told them the payment had been transferred electronically to them. The reply? "We refused that payment. We have to have the last payment by personal check." The manager asked, "Where does it say that in the contract?" "That is our policy." is the only answer she could get. Yep- after 25 years we got our first late penalty, which was higher because it was for the last payment.

Pawn shops around here are up-front. The customer knows how much he will get for his item, and how much it will cost him to redeem it.

When we charge on our credit cards, the company is making us a loan. Pay it off within the grace period, and no charge. But only make the minimum payments, and the card company becomes a loan shark, IMO.

What are those cards called that set a fixed amount secured by that amount in ones bank account? I haven't seen any ads for those lately, but it seems to me that is a good idea for learning how to handle plastic.

Angeline
Speakeasy Moderator
click here to email
semods4@yahoo.com

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I've not seen any numbers and they probably
by Steven Haninger / October 11, 2005 9:45 AM PDT
In reply to: We had a usery law....

aren't published but banking and lending institutions aren't getting the interest they did on large loans these days and aren't giving much on accounts of any size....even the tiered ones. But, they have been able to turn bad debt from being just a recovery process to being a profit center. With this I have a problem. I understand they even will apply credits and debits (checks and deposits) to folks accounts in a sequence to come up with the highest penalty charges possible. This means that checks are applied from largest to smallest and and deposits are done in the other direction and this might enable them to apply multiple penalties for a single overdraft. No one should allow themselves to get into that situation anyway, IMO, but honest mistakes do happen as well as unanticipated postal delays, etc. Accounts that go into default because of bad management and poor decisions by the consumer are another matter. We must all be aware that it's the responsible persons who untimately pay the debt of the irresponsible ones. Bad debt is now its own industry. It makes lots of money for someone and anyone who blows this off as just tough luck for the poor sap who extended himself beyond recovery needs to know that they are actually the ones paying for the life raft.;)

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I'm not sure account fees are in the same class here
by Evie / October 11, 2005 11:48 AM PDT

I do wonder how banks justify $25 fees for funds that are ''there'' but ''not collected'' (e.g. the 3-5 day wait sometimes checks are held). I've also had the bad luck more than once of transfering money from the wrong account or forgetting to do the transfer when automated payments had been scheduled. One bank decided it would do me the ''convenience'' of paying several small purchases on my debit card until the balance went to over -$300 once the fees started to be tacked onto the $10 purchases. I've been told that the order of checks clearing is automatic -- true? verifiable? Dunno.

Still, for *free* I get online bill pay, I can transfer funds between accounts 24/7 online or by phone, check on all transactions, schedule payments to be received on the last day of the grace period, etc. I haven't mailed out a check except when refinancing the mortgage in years. ALL my accounts are managed for free online. Even without the billpay I can schedule all my various phone/cable/utility bills to be automatically paid with a credit card. I can schedule the credit card to be paid off several days before the due date on exactly the due date. I can have funds automatically deposited into one bank account and a portion automatically transferred to a savings account or another account to pay bills, etc. All of these are conveniences that are available to anyone and make it a lot easier to keep track -- ESPECIALLY for those that play the payment juggling game and live paycheck to paycheck -- than even a few years ago. All for ''free'' and paid for by those that don't avail themselves or still make a mistake now and then (like me ;)).

I think we need to be careful sometimes in trying to protect people from themselves. Inherent in some of the attitude about ''predatory lenders'' is that the poor and elderly are too stupid not to fall for it. Unless a person is so old as to have lost some of their mental faculties, why should anyone be assuming my 75 y.o. FIL would be being ''preyed upon'' merely for his age?

Back when it was much harder to get a mortgage, even though I had a good job with good credit, I never could officially qualify for a fixed rate mortgage on my first home (modestly priced condo). Anyone that put less than 20% down back then paid PMI. It didn't matter how much you had in the bank or investments, your total mortgage/tax/fees could not exceed 35% of your gross income. Thus many were ''forced'' to go with adjustable mortgages to qualify under the discounted rates. They actually paid that interest up front in the form of points, and the mortgage was almost guaranteed to go up in 3-5 years to the payment you were never ''qualified'' to pay. In my case, there was even negative amortization if the rate increased more than the cap allowed (this ended up working to my advantage in the long run but it didn't look so good for me when I went to grad school!). My bank made a lot of these loans back then. They had a lot of people being unable to make their mortgage payments a few years down the line. As the bank's bad luck would have it, the real estate market was also tanking at the time so the bank didn't stand to gain much and actually lost quite a bit in many cases by foreclosing. But, they would have been considered ''predatory'' had the market held or increased as they could have foreclosed and made their investment back. Which brings us full circle to the fact that interest rates charged are directly related to the risk the lender is willing to take.

But my point is that even after suffering some credit setbacks, our last mortgage refi was still for a very reasonable fixed rate with very low closing costs and was done by Fed Ex and a notary visiting the house to sign the paperwork. Whole process took <2weeks start to finish. The qualifying rules are different for different institutions. I would rather pay a slighly higher fixed rate than have to take an adjustable and be at the mercy of Alan Greenspan in order to qualify for a mortage in the ''old days''. We went through Greenlight last time and some might consider their commercials to be of the variety you described. I, personally, am glad to be "preyed upon" like this. The more options the better.

The fees on payday loans are indeed exhorbitant. But if I ever found myself in the position to need one, I would rather a legit lender that wouldn't come break my knees if I didn't pay it back be allowed to lend me that money (almost instantly!) than the alternative. Because someone might get themselves into deeper crap because the opportunity is there shouldn't limit the freedoms and options of others. And for those so inclined to get into deep crap with "predatory lenders", I'm happy I won't be paying for the funeral if they have no option BUT the alternative.

Evie Happy

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Once a long time ago I deposited money late Friday afternoon
by Berfert / October 11, 2005 10:19 PM PDT

(This is when I lived from check to check) Saturday I cashed a check at the local NCO club and then another at the PX. Come Monday they gave me a insufficient funds change and then processed the deposit that covered the 2 checks that I wrote. Not only did I have to pay the bank the overdraft charge but I also had to pay the NCO club the bounced check charge. I personally think that they should have processed the deposit 1st because of the earlier date then the 2 checks. I was told it was up to the clerk and please pay up now.

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What burns me, Berfert

is that while they've now eliminated the "float" for consumers, they still keep you from using your own money as fast as it actually arrives. There's no justification for this -- but our wonderful industry-oriented banking regulators have done nothing to prevent this outrageous double standard.

-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com

The opinions expressed above are my own,
and do not necessarily reflect those of CNET!

P.S. A belated welcome to Speakeasy!

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(NT) (NT) Don't you have automatic deposit?
by Evie / October 11, 2005 10:43 PM PDT
In reply to: What burns me, Berfert
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I don't know what kind of check you deposited,
by Evie / October 11, 2005 11:12 PM PDT

... but I had a long running problem with a "local bank" in CT (lots of branches but only in CT AFAIK). Some of my income is from NY employers and when I would go to deposit the checks they would put the "out of state" hold (5 business days at the time) on those funds. At least that bank would pay the checks (anything I sent out always seemed to get there overnight and clear instantly!) so long as I didn't go negative so I avoided the charges at the other end, but it did seem unfair that "uncollected funds" were assessed the same penalty as bouncing a check entirely. Before direct deposit was available to adjuncts, the bank eventually deposited them as cash so long as I went to the teller and reminded them it was payroll. Being pretty much an ATM banker I still ran into a problem here and there ... BUT, not really the bank's fault as I knew the rules!

I now have direct deposit for everything so it's not a problem anymore. It seems to me that overdraft charges (at least if they pay the item) be more fairly tied to the amount you go over rather than the number of items. It can't possibly cost the bank much to clear 5 debit purchases totalling $50 that justifies a $24 charge for each "overdraft". Especially when it is the overdraft charge for the first one or two that causes you to go negative. I admit to being careless a time or two and using the wrong account to pay the utility bill or whatever. The last time this happened I paid the mortgage out of the wrong account. This put me about $150 under but they paid it and charged me $24 for the favor, rather than bouncing the check and deducting the $24. Then the next seven friggin piddly squat gas and grocery purchases by debit were let to go through -- total was under $100 which would have had me still well above zero had they just bounced the mortgage check. So now I'm at around -$400 before they deny my debit at the checkout alerting me that I screwed something up! Sad Such does make me wonder if that mortgage check really cleared before the other purchases as it showed on the printout they provided me! I don't know if there is any way to find out except if there is some sort of auditing of the electronic clearing process. This I would be in favor of.

Evie Happy

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I can claim one victory
by Steven Haninger / October 12, 2005 1:19 AM PDT

When my son enrolled in college, we got him set up with a bank account and credit card. He was working part time and we set up a direct deposit relationship with his employer (also at the university). The card was from the same institution. Because he was an underclassman, his credit limit was low. He always paid his balance in full from the beginning and could do this at a brance on campus. We were told when we became a junior his credit limit could increase. Later, an as a senior with a perfect credit history, he ran into a timing issue with monthy closing date which, BTW, had changed some since the account was opened. He made his payment by mail instead of in person this time and a week later bought something on the card. His payment was not credited in time and he was over his limit by $3. This incurred a $35 dollar charge. My advice was to call them and tell them he was under the impression his limit could be raised and just do that. I told him to pay the balance in full but not the penalty...which he did. He was able to get his limit increased but the next month now got another $35 charge for being late with the fine. So his $3 over limit charge is now $70. What I did was take him to the bank with all the records as well as my own. It just so happened that I had set up an account for college tuition and other large expense many years ago and had a fair chunk of money in it. When I explained what had happened and that his limit should not have been so so, I got no sympathy. The problem was not that he could not have more credit but that he'd never asked for it. I showed them that I was getting my credit limit increased against my wishes by the same bank card and actually had to call them to reduce it. I told them that if this could not be fixed this date, I would pay the full charges and both my son's account and our savings account would be closed on this very day. It got fixed fast.:)

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If those opposed to the ...
by Evie / October 12, 2005 2:07 AM PDT

... high fees charged to those with riskier credit circumstances have their way, we would go back to the day when your son wouldn't have been able to get a credit card AT ALL. And you are actually describing what DK would decry as preferential treatment because your son has a father with "clout" and some son of a poor person would have been preyed upon by the banks. I have found that most credit card companies will forgive the occasional fee if you only ask. The threat of high fees has actually helped me improve my husband's credit. His credit was crap after his divorce and his ex left him with some hefty card balances after draining the accounts. Not only did his card company accept a negotiated payoff (around 50% of the balance AIR), but they offered him a "credit rebuilding" card plan. There was an annual fee, the interest rate was out of this world (like 22%), and the fees for overlimit or late payment were steep (like $40). But we were diligent to pay off the balance on time for a few years. Once better credit offers came along we got rid of that card. That lender is being unfairly, IMO, accused of "predatory lending" because they were WILLING to risk the loss to extend my husband some much needed credit (he had his business at the time, having no credit card would have been next to unmanageable).

It is a misconception that when people bankrupt themselves into destitution it is society that pays. Not really because those folks with jobs would still have them, and those without would be on the dole anyway. The loser is the lender and they do pass that cost on to the consumer. However the consumer with good credit is lavishly rewarded and those that pose the greatest risk pay for the ACCESS to credit. That's the way it should be IMO. If DK had his way about the 12%, he would be complaining daily about the outrageous interest rates he had to pay despite his good credit history. Because if you only charged 12% for money lent to high-risk borrowers, you would have to charge that 12% on large loans to sure-thing borrowers to cover your losses.

When I bought my condo as a single in my 20's I was an oddity of sorts. Even with a good job with a good salary I didn't qualify to own my condo -- it took some ingenuity on my part and the cooperation of my credit union that didn't put my loan for half the downpayment on the books until the day of my closing. Someone with the same financial situation today would find themselves with a whole lot more options for home ownership which is why ownership rates are up.

Evie Happy

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Banks charge a lot for things like overdrafts because
by Kiddpeat / October 12, 2005 6:50 AM PDT

they know they can, and few customers will leave. They don't want overdrafts anyway, so they will charge through the nose for anyone causing them. There are other items like that where bankers know they can charge a very high price and get it.

The late fee on credit cards is another of these items. My cc does not have late fees, and I discard offers for any card which has them.

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No late fees?
by Evie / October 12, 2005 7:18 AM PDT

What bank, pray tell? I've had credit cards with better and worse fees. But no late fees? That's a new one.

Evie Happy

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No late fees?
by Kiddpeat / October 12, 2005 9:40 AM PDT

It's called USAA, and is restricted to current or former members of the miltary and their families. They've offered to upgrade me to a more prestigious card (with late fees), but I've declined. I'm pretty sure there are still no late fees on that card, but my wife pays the bills and she is unlikely to get a late fee even if they have one.

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Well that counts me out!
by Evie / October 12, 2005 9:59 AM PDT

I don't mind late fees. With online bill pay I can schedule all payments for their due date, or schedule them at the various websites for the various services. Voila! No more late fees. It used to be a PITA with mailing and having no recourse if it didn't arrive on time. And it helps that now I can pay the Home Depot bill at the store if I forget and I'm out and about, I can do that up to closing time at any store on the date due.

Evie Happy

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I wouldn't accept an answer of "It's up to the clerk. That's
by Kiddpeat / October 12, 2005 3:56 AM PDT

why people have the ability to waive charges. If you deposited cash, the bank had no excuse. They ripped you off. If you deposited a check, the order the items were processed would not matter. The bank had not had time to cllect the money from whomever the check was drawn on. Thus, they're paying out cash with noting but uncollected funds to cover it. That's why you would get an overdraft.

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On the other hand ...
by Evie / October 11, 2005 12:58 PM PDT
In reply to: Agree and disagree

... the rates being SO HIGH on such things as payday loans can act as a deterrant to availing oneself of that option unless things get really desparate. So the more exhorbitent options are actually less predatory in a round about sort of way than the financing with more "reasonable" rates. I'm far more likely to only borrow what is absolutely needed against my next paycheck when the charge is 25% of unpaid balance per month than I might be if interest is 12% or even 18% annually with minimum payments due of only a fraction of what I've borrowed. It's the latter that get people into trouble to begin with, not the last ditch means.

A payday loan is unsecured debt for which no credit checks are generally run. The lender has no power to deduct the amount owed from your account, etc. If you don't pay them, and the loans are for small amounts, it is often not worth their efforts to collect. So they want you to repay reasonably soon, but those high fees pay for the convenience to you for getting the money and to cover their losses for those that don't. Same goes for the rent-to-own furniture/appliance deals and car loans. Yeah, these are secured loans/payment deals and they can re-possess your possessions, but honestly, what is a "used 4 months" couch worth to them? Nada!

If one considers rent-to-own deals for the "poor" predatory for sofas and TV's, why doesn't anyone b!tch about the absurd cost of leasing a vehicle if one is middle class or even "evil rich"? Why does anyone lease rather than own? If the rich can make a decision, why are the poor (particularly the so-called "working poor") somehow assumed to be unable to do the same? Some of the less well off folks I know are MUCH better at managing that which they have than some of the more well off ones are at living within their means!

Evie Happy

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Here's what I see that has changed
by Steven Haninger / October 11, 2005 9:29 PM PDT
In reply to: On the other hand ...

Banks and lending institutions are not so conservative with their money lending policies anymore. They are very aggressive in soliciting customers to loan money to. In the past, it seemed that banks did not want any part of taking on potential bad debt. Now, you will hear commercials encouraging folks with bad credit ratings to "Come on in!". In the past, the loan process meant going into a facility and sitting down in front of a lending agent. Everything was on paper and the process could be a bit intimidating. One knew up front what he/she was getting into. The preditory practice is a bit different because these facilities are using marketing strategies. Anyone who believes marketing is always on the up and up is foolish, IMO. The goal is to make the sale first and worry about details later. The same that has happened in other markets for a long time has crept into what we considered the "professions" as well such as medical/legal. As such, the banks with armed guards, barred teller cages and stern faced banking agents is gone. I even remember as a boy living in Chicago going to the bank with my grandmother. There was a high up platform where a security guard held a shotgun in plain view! Who'd go there now?! Anyway, I fully believe it's been almost encouraged by some institutions to take on excessive debt so one can have things now they'd have waited for in days past. Folks who make minimum payments every month probably are paying for items later that they no longer own. Those who default will suffer some but that suffering is also distributed among the honest and responsible of us.

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Interest rates usually reflect the risk. The exception may
by Kiddpeat / October 11, 2005 4:31 AM PDT

be the local loan shark. High rates simply mean that losses are high. High rates are needed to cover the losses. If the customers were not risky, they could get their loans from a lower rate source. That doesn't say that the lenders are fine, upstanding people, and it doesn't mean that they are not.

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Baloney, Evie.
by Dave Konkel [Moderator] / October 11, 2005 4:10 AM PDT

Predatory lending is one of the major reasons the poor can't manage to get out of that situation -- not only do they take in less than the well-to-do, but they're charged through the nose for services that we get for little or nothing. The usury laws (typically 12%) were only relaxed in the 1980's because when inflation hit more than 12%, they stifled the banking system. With inflation well under historical levels over the decades when usury laws were a fixture of American society, it's long past time those safeguards were reimposed, so that only the real "mob" charges over 12%, not the financial mob!

-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com

The opinions expressed above are my own,
and do not necessarily reflect those of CNET!

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Baloney back at you Dave
by Evie / October 11, 2005 4:31 AM PDT
In reply to: Baloney, Evie.

What does K think of your 12% limit on interest? If lenders were limited to that, then the poor really couldn't get credit at all as you have erroneously surmised. Or I suppose we would hear you complaining about higher interest rates despite your good credit rating. The risk has to be spid for somewhere!

"Predatory lenders" are not responsible for most people's financial straights.

Evie Happy

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Also re: 12%
by Evie / October 11, 2005 7:29 AM PDT

Are you aware of the predatory governments and their activities taking advantage of seniors? My folks are one of the few from my era growing up that still live in the neighborhood. The reason is because most property taxes exceed the mortgage payments they paid on the homes up to even about 15 years ago. Now the taxes are through the roof, but those that own the homes have to pay them. Unpaid/late payments are charged 18% interest and if it gets late enough, you are talking tax liens and paying the attorney fees to be foreclosed upon. My parents pay about half the amount they paid for their home in property taxes each year now. Aside from keeping the home in good repair, it has not been altered significantly from when I grew up there. Many of the elderly have been forced to sell. With the appreciation of home values, many ARE able to take out reasonable reverse mortgages or other creative options offered by the so-called "predatory lenders". In Nassau County LI it was on the news a while back how many people were foreclosed upon for backtaxes of about 20% of the market value of the home but once those were paid off they didn't get the difference.

If you even make a mistake on taxes and owe the IRS you get socked for more 18% interest on a "loan" you didn't even know you took and add on the penalties. The government can just seize your bank accounts if you don't pay. Creditors can't do that.

Evie Happy

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Guess who buys the homes taken for back taxes. Think
by Kiddpeat / October 11, 2005 11:28 AM PDT
In reply to: Also re: 12%

politically connected. Those stories REALLY get buried FAST.

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That's fine DK. Impose limits and some of the sources of
by Kiddpeat / October 11, 2005 4:37 AM PDT
In reply to: Baloney, Evie.

funds will dry up. Just don't try to force folks to make loans, or retroactively change the rates they are charging. If people can't generate a sufficient return on their money, they will invest it elsewhere.

Of course, the unstated part of your post is that the amount of money being loaned will not change. If it does, then additional regulation may be necessary. Right?

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What sources "need" usurious rates, KP?

Maybe the mob will have to go back to breaking kneecaps to get vig that high!?

-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com

The opinions expressed above are my own,
and do not necessarily reflect those of CNET!

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HOLIDAY GIFT GUIDE 2017

Cameras that make great holiday gifts

Let them start the new year with a step up in photo and video quality from a phone.