Payday loans are predatory? Thats what the opposition would like you to think.

The war over payday loans continues in Arizona. Last week voters rejected Proposition 200, a ballot initiative financed and written by the loan companies to allow them to continue to charge their current interest rates on small loans.

Those who voted against proposition 200 claim that payday loan stores take advantage of and prey upon the poor.

What? “Prey upon the poor”?

This isn’t the animal kingdom, these brick and mortar stores are not preying on anyone, but they will be praying to stay in business if they can’t persuade lawmakers to ignore the voter’s wishes which was counted 60% to 40%.

Propaganda is to Blame

Much of the propaganda against the loan companies comes with talk of the payday lenders interest rates on the short term loans they give out. Even though, by law they can’t charge more $17.65 for a $100 loan, the opposition advertises the interest rate in terms of APR, so you would have to literally default on your two week payday loan for an entire year to accrue the APR interest rates that the opposition uses in their campaign against the small loan establishment.

Unfortunately, many voters who have no experience with payday loans are easily swayed by these twisted truths. If lawmakers pass the new new initiative their will be a 36% interest rate cap which means lenders will only be able to make $1.36 in revenue for every $100 they loan out. This will drive them out of business overnight.

Preying on the Poor?

As for preying on the poor, this is a shot below the belt by the uninformed and uneducated opposition. You cannot qualify for a payday loan, unless you have proof of income. In fact the average consumer who takes out payday loans makes between 30K and 40k a year.

A closer look at the truth!

As for being predatory, Payday loans don’t pounce upon you while you are sleeping nor do they lie in wait in unsuspecting places to devour your financial resources. There is no element of surprise here. When it comes to payday loans the consumer is not under attack. They have to initiate the search for there payday loan source, read the contract and sign it themselves. It is a service that is provided with terms and conditions that consumers can simply say “YES” or “NO” to. No physical force, no hypnosis, no telepathic mind control, or anything of else of the likes. Just a simple choice.

This kind of opposition is only opposing the freedoms that Americans have to decide for themselves. The only predator here, is the opposition against the payday loan companies.

If you want a payday loan, great! If not, fine. I couldn’t be simpler or more straight forward than that.

Congress will pass legislation next year that will make Wall Street financiers civilly liable for funding predatory and reckless mortgage loans, predicted Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee.

Your Instant Payday Loans News Source Quoted With Edits From: A bill to make Wall Street accountable for loans urged (Seattle Post-Intelligencer)

Assignee Liability and Predatory Lending

This article raises the issue regarding “Assignee liability”. Assignee liability is the term used to hold individuals responsible for holding or buying a predatory loan. This follows in the wake of this years financial crisis and if implemented will help prevent a further one from happening.

What is Predatory Lending and Predatory Loans?

Predatory Lending although not clearly defined by legal law, it’s practices are. Wikepedia best defines predatory lending as quoted below:

“the practice of a lender deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against.”

Although, a legal agreement is formed and signed between two parties of a predatory loan, it’s the predatory lender’s deception in taking advantage of a less informed borrower that terms a loan as predatory.

Why the need for Assignee liability

Can Assignee Liability Tame the Bull? Or will everyone need Instant Payday Loans?

The financial crisis that we are currently enduring was largely caused in part by Wall Street’s aggressive marketing of mortgage backed securities. These securities as the article states, were each made up of thousands of high risk sub prime and nontraditional loans. This ultimately led to the expansion of high risk predatory lending followed by the pandemic of foreclosure and defaulted loans that we have seen sweep the country.

Assignee liability will bring accountability to everyone including wall street in regards to high risk predatory loans.

What next and what to watch for…

If there is anything good that has come out of this crisis, assignee liability seems to be one of them. Until the laws are properly defined and the written we won’t be able to see just how much will be affected by it’s implementation. We want to be careful as not to invite anymore government regulation into our life as necessary yet ensure our own protection from such practices as well.

This article was brought to you by your Instant Payday Loans News Source

Grais & Ellsworth LLP, a New York litigation firm that represents investors in asset-backed securities, announced today a briefing for investors in securitizations of loans originated by Countrywide Financial Corporation .

Your Payday Loans News Source Quoted With Edits From: Grais & Ellsworth LLP to Brief Investors in Countrywide ABS on Cost to Them of $8.4 Billion Predatory Lending Settlement (PR Newswire via Yahoo! Finance)

$8.4 billion settlement

Countrywide Financial Corporation was recently taken over by Bank of America. Countrywide’s new status as Bank of America’s subsidiary doesn’t excuse its previous actions. Countrywide had predatory-lending charges brought against it and has reached a settlement with Illinois, California, and 9 other states; Countrywide has agreed to adjust the mortgage loans of close to 400,000 customers, which is estimated to cost $8.4 billion.

Responsible Use of Money

Real money is not Monopoly money

With crisis, comes panic. So, in the current financial crisis, people are panicking; they are trying to place the blame for the financial downturn anywhere they can. The fact of the matter is that the irresponsible use of money is the real culprit. Banks like Countrywide, the government, and the people all played a part in this mess. This is not Monopoly, and we shouldn’t treat our money as though it is. There’s nothing wrong with mortgages, payday loans, cash advances, and loans in general. It’s the misuse of all those things that has got America in the financial trouble it’s in now. The first step towards financial stability in America is the responsible use of money and payday loans.

The Area Office on Aging of Northwestern Ohio and the TRIAD Council of Northwest Ohio will host senior safety workshops today and tomorrow. The workshops, which begin at 9 a.m. each day, coincide with the Ohio TRIAD conference and will be held at The Pinnacle, 1772 Indian Wood Circle, Maumee. The events will include sessions on crimes against the elderly, predatory lending and mortgage …

Your Payday Loan News Source Quoted With Edits From: Sessions in Maumee to focus on seniors’ safety (The Toledo Blade)

Ohio is Protecting Their Elderly From Financial Predators

Caution! Is your mortgage lender taking advantage of you?

The predatory lending issues in Ohio have cause TRIAD Council of Northwest Ohio to host safety workshops for seniors. The events will include sessions on crimes against the elderly, predatory lending and mortgage rescue, power of attorney, silver alert for missing elderly people, and protecting your identity.

Much of this comes as a result of the current mortgage crisis. With a number of lenders being charged with predatory lending as well as the escalating number of mortgage defaults as a result of predatory lending. Ohio has stepped up to bat to help their senior citizens to avoid these types of predators and to educate them on the safeguards to implement to avoid being taken advantage of.

Tactics of Predatory Lenders

One of the “tell tell” signs of predatory lending is something called “mandatory arbitration”. Mandatory arbitration prevents borrowers from seeking legal options in court if they discover that their home is being threatened by loans with illegal or abusive terms. This is a big red flag and should be avoided.

Another tactic of predatory lenders is using over zealous sales tactics to pressure consumers into sub prime mortgages for there own benefit. If you feel that you are being pushed into any unreasonable terms, it is strongly advised that you seek help elsewhere. Unlike most predatory lenders, payday loan providers are up front about all terms and conditions of the loan you are obtaining, so the pressure is off and you are able to make a clear decision.

Avoiding Predatory Lenders

Identifying the tactics of predatory lenders is one thing but it’s best to avoid them if possible before you see their tactics at work. This can be accomplished by asking your candidate for referrals or by asking close family and friends for references of lenders they have personally worked with over the years and trust. This will help avoid unnecessary inquiries on your credit report which drops your score and increasing the difficulty in obtaining a loan. If you are in need of a payday loan, most lenders do not require a credit check, thus making it easy to acquire a loan that will not affect your credit.