2 May, 2012 | St. Louis Criminal Defense Lawyer | Missouri Federal Criminal Defense Attorney

Monthly Archives: May 2012

5 Businesses That Rip Off The Poor

Stay clear of businesses that prey on the poor. The following five are some of the worst offenders.

1. Payday Lenders. There are over 19,000 payday loan outlets across the United States. Interest rates are typically in the neighborhood of 400%.

2. ‘Buy here, pay here’ Car Lots. You will pay a steep markup on the car itself and will be hit again on the interest rate. Large volume dealerships that offer sub-prime car loans may offer better deals to consumers with low credit scores.

3. Used Car Leasing. Beware of used car dealerships which offer to lease you a car. They usually require large down payments. Dealers retain the cars’ titles, so they don’t have to go through formal repossession procedures. If you stop paying, they simply come take the car or disable it with a remote ignition lock. I see clients paying $400-$500 per month for old high mileage cars. They could do much better.

4. Rent To Own. Rent to Own outfits specialize in getting people to pay two to four times the retail cost for furniture, computers, appliances, electronics and even tire rims. Consumers pay dearly for their impatience.

5. Banks. A 2008 Federal Deposit Insurance Corp. study found that people earning less than $30,000 were far more likely to incur overdraft fees than those with higher incomes. Their fault? Sure. But $35 fees add up fast. Banks have also been known to reorder purchases maximize overdraft fees. A $1.50 debit transaction to buy a bottled water instantly becomes a $36.50 bottle of water. Credit Unions typically charge lower fees than banks and may be a better choice. Also, you can choose to opt out of overdraft protection or link your checking account to a savings account which will serve as you overdraft protection.

The depression era adage of “Use it up, wear it out, make it do, or do without!” is always good advice.

Content adapted from Liz Weston.

Foreclosure Help: Lenders Settle With State Attorneys General

If you are currently fighting to save your home from foreclosure, help may be on the way. Some of the nation’s largest home lenders have agreed to provide help to struggling homeowners trying to avoid foreclosure. Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Ally Financial will be providing homeowners in the State of Missouri with approximately 195 million dollars of mortgage relief as part of a deal brokered by Missouri Attorney General Chris Koster along with Attorneys General across the country.
If you are fighting to save your home from foreclosure, this settlement may provide you new options your lender did not previously offer. Contact your lender and ask to be considered for the settlement benefits. It could help you save your home.

KEY PROVISIONS OF THE SETTLEMENT

PRINCIPAL REDUCTION

• Key provisions include aid to homeowners who need loan modifications now, including first and second lien principal reduction. This means you could see the amount you owe on your first or second mortgage reduced. Part of the loan will be forgiven.

• Borrowers who are underwater in their homes and behind on their payments but could afford to make them at a reduced rate will receive an estimated $86.5 million in principal reductions and other borrower assistance programs. Nationally, the servicers are required to work off up to $17 billion in principal reduction and other forms of loan modification relief nationwide.

• State attorneys general hope the settlement’s requirement for principal reduction will show other lenders that principal reduction is one effective tool in combating foreclosure and that it will not lead to widespread defaults by borrowers who can afford to pay.

REFINANCING OF UPSIDE DOWN HOMES

• Aid to borrowers who are current, but underwater. Borrowers whose houses are worth less than they owe will be able to refinance at today’s historically low interest rates. Servicers will have to provide up to $3 billion in refinancing relief nationwide, roughly $38 million of which will go to Missourians.

DAMAGES

• Payments to borrowers who lost their homes to foreclosure with no requirement to prove financial harm and without having to release private claims against the servicers or the right to participate in the OCC review process. Missourians who have been foreclosed upon are eligible to receive roughly $2,000 each, up to about $31 million. Nationwide, $1.5 billion will be distributed to some 750,000 borrowers.

• Payments to signing states for penalties and economic harm caused by the unfair and deceptive conduct. The state of Missouri will receive over $40 million.

IMPROVED PRACTICES

• First ever nationwide reforms to servicing standards, which no single federal or state agency has been able to achieve. These servicing standards require single point of contact, adequate staffing levels and training, better communication with borrowers, and appropriate standards for executing documents in foreclosure cases, ending improper fees, and ending dual-track foreclosures for many loans.

• State AG oversight of national banks for the first time. National banks will be required to regularly report compliance with the settlement to an independent, outside monitor that reports to state Attorneys General.
Servicers will have to pay heavy penalties for non-compliance with the settlement, including missed deadlines.

• Banks are still accountable for other claims not covered by this settlement. The agreement holds the banks accountable for their wrongdoing on robo-signing and mortgage servicing and offers a narrow release related to this conduct. A joint federal-state task force has been formed to investigate and prosecute those responsible for the collapse of the mortgage lending and investment markets.

• Individuals may still pursue private claims