Dragged Down by Debt

[question everything]

Newsweek.com
Quinn: Dragged Down by Debt
People with shaky credit are getting suckered by risky loans against their paychecks, homes—and even cars.
By Jane Bryant Quinn
Newsweek

(snip)

With a payday loan, you write a postdated check against your next pay period and walk away with cash. The fees are stiff—Harris usually pays $50 for a $250 loan. In two weeks, the loan falls due. If you can't pay, it costs another fee to renew the debt for another two weeks. Pretty soon, the amount of interest could exceed the original loan, making it difficult to dig out: Harris's receipts show an annual interest rate of 521 percent.

(snip)

Car-title loans can get consumers into even more trouble, says Randall McCathren, president of the auto-finance consultant BLC Associates. Like payday loans, they're marketed as a way to get quick cash in an emergency. You can borrow anywhere from $250 to $2,500 against a paid-up vehicle, giving the lender your title and a duplicate car key as security. There's a fee upfront and a triple-digit interest rate, the loan falls due in 30 days, and each time you renew you're charged the fee, plus interest, all over again. If you can't pay, you lose the car or truck you may need to get to work.

(snip)

Payday and car-title lenders tend to cluster in low-income neighborhoods—especially around military bases, where families are young and borrowers aren't very savvy about interest rates. Congress recently slapped a 36 percent interest-rate cap on loans made to members of the armed services. But it left out everyone else, who pay rates that sometimes exceed 700 percent, says CFA's Fox.

(snip)

So far, the Feds have pretty much let the lending predators range unchecked. But there's something new today—"the high level of pain and suffering," says John Taylor, head of the activist National Community Reinvestment Coalition. "If this isn't enough to move Congress to act, what will it take?"


URL: http://www.msnbc.msn.com/id/18367501/site/newsweek/

[fed-up]

1. otherwise known as "getting kicked while down"-they want to suck every last penny from poor folks nt

[Sapphire Blue]

2. Edwards Announces Plan To Protect Homeowners And Fight Predatory Mortgages

Edwards Announces Plan To Protect Homeowners And Fight Predatory Mortgages
John Edwards for President
Apr 4, 2007

Davenport, Iowa – As part of his ongoing effort to expand and strengthen the middle class, Senator John Edwards today released an aggressive plan to end the harmful lending practices that have put millions of families at risk of losing their homes. At a town hall in Davenport, Iowa, Edwards called for strong national legislation to regulate mortgage abuses and prohibit predatory mortgages. He also proposed immediate steps, including bankruptcy reforms and the creation of a Home Rescue Fund, to provide relief for families who are struggling to keep their homes.

"This is about the future of the middle class," said Edwards. "While Washington turns a blind eye, irresponsible lenders are pulling a fast one on hard-working homeowners. Using deceptive practices, hidden fees, and abusive terms, they have already taken billions of dollars from hard-working homeowners, destroying their nest eggs in the process. For too many families, homeownership has become a risky gamble when it should be the foundation of economic security. It's time to put an end to the shameful lending practices that are compromising our strength as a nation."

Edwards believes that we must act now to prevent widespread foreclosures from devastating communities. Home foreclosure filings rose to 1.2 million in 2006—a 42 percent jump—due to rising mortgage bills and a slowing housing market. The increase in subprime loans and predatory mortgages, which carry abusive terms and excessive and hidden fees, has put more and more American families, especially families of color, at risk of ruining their credit histories and losing their homes. Additionally, economists are concerned that housing sector troubles could put downward pressure on consumer spending and the economy as a whole.

Edwards has proposed a plan to fight mortgage abuses and predatory lending and help families avoid foreclosure. Edwards' plan will:

Enact a strong national law, based on North Carolina's successful law, to prohibit the worst abuses in the mortgage market. The law will strengthen underwriting standards to ensure that borrowers receive suitable, affordable loans and ban kickbacks to mortgage brokers that encourage them to steer borrowers into more expensive loans.

Amend the bankruptcy code so families with "underwater mortgages" — mortgages where they owe more than their house is worth — can keep their homes if they pay off the full value of their homes on fair terms.

Create a national Home Rescue Fund to help families in danger of losing their homes. The fund would help homeowners negotiate with lenders and find refinancing options and would provide small loans to cover back payments.

For more information, click here: http://johnedwards.com/about/issues/predatory_mortgages/.


http://johnedwards.com/news/headlines/200700404-predatory-mortgages/index.html

Transformational Change For America And The World - JOHN EDWARDS 08

"I'm proposing we set a national goal of eliminating poverty in the next 30 years." - JOHN EDWARDS 08

Silence is Betrayal - JOHN EDWARDS 08

[seriousstan]

3. A fool and their money.......