HUD reaches agreement with Illinois lender accused of discrimination

The Department of Housing and Urban Development and Alpine Bank amp; Trust have reached an agreement to resolve claims that the lender discriminated against African-American and Hispanic mortgage applicants.

The Rockford, Ill.-based company will create a $1 million loan program designed to grow mortgage lending to residents of areas with African-American and Hispanic majorities as part of the agreement, HUD said Friday. The bank will also provide fair lending training to its staff and offer community outreach to minority neighborhoods such as homeownership and credit counseling.

Are you a candidate for debt negotiation?

By Andrew Housser

Debt negotiation – also called debt settlement – is a process where an expert negotiator works with creditors to reduce the amounts a consumer owes them. The consumer typically pays back the reduced debt amount in two to four years.

Are you a good candidate for debt negotiation? To know for sure, you can discuss your situation with a reputable debt relief firm. One good place to start your search is with a voluntary industry organization such as the American Fair Credit Council (AFCC). The AFCC operates under a strict code of ethics, and does not allow any firm to join if it charges a fee before a settlement is reached on debts it is negotiating for consumers.

You also can consider the following checklist. People who can benefit from debt negotiation usually meet most or all of these criteria.

1. You have unsecured debt. Debt negotiation works with unsecured debt, which is debt that does not have specific property (like your house or car) serving as collateral for payment of thedebt. Credit card debt is a main type of unsecured debt. In some cases, negotiation can significantly reduce the total amount of debt owed. Debt negotiation, however, cannot resolve every type of debt. You will not be able to eliminate student loans, child support, alimony or back taxes.

2. You owe a significant amount. Debt negotiation is most helpful to people with significant unsecure debt, generally at least $10,000.

3. You want to avoid paying fees upfront. The Federal Trade Commission issued rules in 2010 that bar debt negotiation companies from charging fees before they resolve your debt. Instead, during the negotiation process, you set aside funds in an account that you control. Later, you will use these savings to pay the reduced debt amount. Once you have received the service you expected, you will pay the agreed-upon fee to the debt negotiation firm.

4. You understand the company and the process. Be sure to ask questions. After all, you are entrusting your selected company with your finances. How long has the company been in business? How many customers has it served? Do the company and its employees provide service through the life of the program? What are the company’s dropout and completion rates? How will the company help with creditor calls? Will they provide assistance if a payment issue goes to court? Find a company that will work with you through the entire period, and all circumstances, of your debt negotiation.

5. You understand the cost of debt negotiation. Credit counseling often appears to be affordable. That is because people pay monthly fees. But over a five-year plan, it can be more expensive than debt negotiation. Imagine you owe $20,000. Credit counseling might cost $30,000 over five years because of the fees and interest. In comparison, debt negotiation can cut total debt in half. In a debt negotiation plan (which typically takes two-four years), those who stick with the program might pay about $14,000 total, including fees, to pay off a $20,000 balance.

6. You understand the trade-offs. During the debt negotiation process, you will miss payments. Lenders will still charge interest and fees. Missing payments may temporarily damage your credit further, although the impact, usually is far less than that of bankruptcy. Of course, if you have been struggling to make minimum payments, your credit rating has already suffered. Creditors also might try aggressively to collect. They could do this through phone calls or even suing for the amount you owe. For these serious reasons, debt negotiation is only for people in very serious debt.

Debt negotiation can be a solution worth considering if you are struggling to make minimum payments and cannot see a way to pay off your existing debts. The process can be tough, but it can reduce outstanding debt, help you get a new start financially, and assist in developing new financial habits that will pay off in the long run.

Windsor Family Credit Union enters payday loan market

A local credit union is offering an alternative for people borrowing high interest payday loans.

Windsor Family Credit Credit Union has introduced SmarterCash: A Pay Day Loan Alternative. It offers loans ranging from $500 to $2,000, with fees of $1.42 for every $100 borrowed.

Pay Day Loan companies in Ontario can charge up to $21 per $100 borrowed.

To access the payday loan, customers must have an account with WFCU, which will cost you $5.

We need to educate users of payday loan entities that they are paying too much for short term financing when there is an alternative, said Eddie Francis, President, WFCU Credit Union in a statement.

He believes this is a smarter and responsible solution to high interest payday loans. A local financial adviser said her industry calls payday loans a necessary evil, because its the only way for some to access credit.

Were not happy that they exist, said Wendy Dupuis, executive director at Financial Fitness.

She want to remind people that payday loans should be for emergencies. But theyre often used by people on low incomes to get by.

The debt spirals and gets out of control and people are in trouble very quickly, said Dupuis.

She thinks the WFCU loan could be a better alternative.

Its not going to serve everyone, simply because the interest rate is still there, said Dupuis, Its still high. We have to remember these are the people who can least afford to borrow money. I know that theyre in a high risk category but they are the people that are generally not able to access any other form of credit. And for credit to be that expensive for them, especially for small amounts is really harmful.

Thats something Elijah Cadarette knows well. Hes borrowed from payday loan companies before. Cadarette said one lender charged him 49 per cent interest. He has advice for anyone thinking of using them.

I would say you have to consider the rating, said Cadarette, What you have in terms of income. I think payday loans are bad news regardless.

WFCU also offers a Step Up loan program for those using the SmarterCash loans. It will offer members who have a successful credit history lower interest rate, higher limits, one-year terms and cash advances.

Dupuis offers another solution. She recommends those who are stuck in the cycle of using payday loans to get back to go to a reputable non-profit credit counseling agency.

There is help available in the community, she said.

America’s cash-strapped teachers are a target for predatory lenders

If you are feeling the pain, though, you can be fairly sure that your child’s teacher is reeling. Cutbacks to school funding mean that budgets for items like markers, staplers and construction paper have been slashed to the bone. One Connecticut teacher reported that her funding per child for the entire school year is now $1.60, down from $15 about a dozen years ago.

While teachers beg parents for help, and make pitches for support for specific projects from the general public on, they inevitably end up dipping into their own pockets to fill in the gaps. The average teacher forks over $500 of his or her own money every year, with 10% spending more than $1,000 on their students, for a total of $1.6bn nationwide.

Meanwhile, there’s new evidence that teachers are making an ever greater financial sacrifice in other ways. We’re still prone to argue that while teachers tend to collect relatively small paychecks, relative to their levels of education and experience, their benefits help to compensate for that. That long summer holiday? The healthcare and other benefits? The pension?

Well, a new report from the Economic Policy Institute tells us that it’s time to re-evaluate our assumptions. In 1996, in absolute terms, teachers earned 4% less than workers with the same kinds of education and credentials. Today, that wage penalty is 17.3%. Adjusted for benefits, they are still 11% underpaid, compared to a 2% wage gap back in 1996.

The report notes that this is most dramatic for women, for whom teaching was once a way to earn better wages than they could anywhere else. In 1960, the EPI notes, women teachers had a 14.7% wage gap in their favor. Today, they earn 13.9% less than they could, on average, by taking their skills elsewhere.

Some teachers have done the math and are leaving the profession. One Florida woman wrote about what she described as the heart-breaking decision to do just that in the Palm Beach Post. She calculated that, at the age of 32, if she wanted to stop living with her parents and keep her teaching job, her current salary would leave her with about $200 a month for food, gas, cell phone, and any entertainment expenses.

“Could I count my pennies and scrape by? Barely,” she wrote. “But what kind of life is that? And should I have to, with a college degree, after ten years of service, in a career that impacts the lives of our future leaders?”

It’s a reasonable question.

Sadly enough, the cash-strapped position in which many teachers find themselves leaves them in the low- to middle-income part of the economy that is targeted by the same kind of lenders that seek to do business with people with poor or no credit, the underemployed, those without bank accounts or those with spotty work histories.

Last month, the 600,000 or so members of New York State United Teachers, which includes classroom teachers as well as college and university faculty, staff and support staff, received a catalog from MyPaycheckDirect. Endorsed by the union’s benefits department, the company – a division of Bluestem Brands, whose other businesses include the better-known Fingerhut – offers recipients the opportunity to buy a whole array of consumer goods and pay for it in a series of installments. The company minimizes its own risk by capping the amount that someone can buy based on salary and years of experience (if you’re a teacher with only two years of experience, earning only $20,000, you can buy only $500 worth of goods; if you’re making more than $34,000 a year and have been a member of the union for more than 20 years, you’re eligible to spend up to $2,500). And of course, it also will have access to your paycheck, as its moniker implies.

The company trumpets the ease and convenience of the plan. No credit check is required; you can make 26 biweekly payments or 12 monthly payments; best of all, it announces, there are no interest fees!

The problem? Instead of paying interest, a teacher who opts for these installment purchase plan will end up paying a higher price for their new consumer item – often significantly higher – than they would if they had chosen to shop around and been in a position to pay conventionally, whether by using a credit card (even if it took a few months to pay off the full bill, meaning that they would end up paying a few dollars in interest as well as the principal).

I conducted a completely random test of some 30 items, and discovered that every one of them carried a hefty premium price tag. The worst was an Ameriwood Cosco Leni Crib, priced at $659.99 (or $55 a month). For less than four monthly payments, a teacher could have purchased precisely the same crib from Amazon and several other sites; MyPaycheckDirect charged a 266.15% premium for the “convenience” of the 12 monthly payments and no credit check.

Anyone wanting to buy the Rockland three-piece metallic luggage set also faced an outsize premium (183%); they could have paid only $169.49 to Amazon for items for which MyPaycheckDirect are asking $479.99 (or $40 a month).

Most of the other premiums are less extraordinary, but still hefty, especially when put in the context of a teacher’s already limited budget. A 16-cup rice cooker, $40 at Kohl’s, is $60.99 in the catalog; a Hoover cordless handheld vacuum that can be bought for $84.20 at Amazon is $159.99 here. An 80″ cat tree for your resident felines, $142.99 at Target, is $199.99 at MyPaycheckDirect. Interested in a LeapFrog LeapPad3 WiFi Learning Tablet? (It is back to school season, after all…) Toys R Us and Walmart will both sell you one for about $90, but MyPaycheckDirect wants $129.99, 44.4% more.

The icing on the cake: while many of those retailers also offer free shipping for big-ticket items, MyPaycheckDirect doesn’t seem to do so.

This online retail campaign isn’t targeting the classic subprime consumer: people who have made poor financial choices and are suffering as a result. Instead MyPaycheckDirect appears to be directing its catalogs at civil servants and other individuals who earn less than other members of society simply because they’ve chosen to put their personal wealth behind other considerations – like educating our children. The company clearly hopes that they’ll throw financial caution to the wind, and overpay simply in exchange for the ability to pay a manageable amount each month.

Carl Korn, a spokesman for NYSUT, says that inside every catalog there’s a letter from the union’s Member Benefits Department advising the recipient “to shop and compare before making a purchase with PayCheckDirect and consider this program as an alternative to using their credit cards”. The union also offers members an array of voluntary financial programs, including financial planning and credit counseling.

“In a perfect world, consumers would always budget carefully, carry no credit card debt and save until they have enough money to purchase what they want,” Korn adds. “In the real world, PayCheck Direct is an appealing option for some of our more than 600,000 members, especially those who might not have the means to purchase products like computers or refrigerators.”

Still, it’s hard to imagine a case, based on the 30 or so items I looked at – other than an emergency replacement of a broken fridge or a dead laptop – where making a purchase from these catalogs is a better option than using a conventional credit card or simply saving a little bit from a paycheck each week or each month until they could purchase it outright.

In the aftermath of the 2008 financial crisis, we’re all alert to the risks associated with predatory lenders. But what about a different kind of profiteer? Firms like Paycheck Direct are all too aware that teachers and others have fallen behind financially; that creates a great new market for them. The only way to fix that is to pay teachers what they’re worth.

National Debt Relief Shares How Credit Counseling Works

National Debt Relief recently shared in an article published July 19, 2016 some very useful insight on credit counseling. The article titled What You Need to Know About Credit Counseling and Debt Consolidation aims to help consumers who are trying to manage their debt payments understand how credit counseling and even debt consolidation works.

Dallas, TX (PRWEB) August 15, 2016

National Debt Relief recently shared in an article published July 19, 2016 some very useful insight on credit counseling. The article titled What You Need to Know About Credit Counseling and Debt Consolidation aims to help consumers who are trying to manage their debt payments understand how credit counseling and even debt consolidation works.

Debt is deeply embedded in the lives of consumers and it has already been a part of life. From a mortgage loan to get a house to a car loan to buy a car and even student loans to go to college – these debts has formed a way of life. But these should not define or even prohibit a way of life. This is why there are credit counseling options for consumers but it is important to have an understanding of how they work.

The article starts off by pointing out to consumers that not all credit counseling companies are the same. When choosing one, it is recommended that consumers look for either Financial Counseling Association of America (FCAA) or the National Foundation for Credit Counseling (NFCC) accredited companies. This is because this and other association require their member to adhere to strict standards aimed to protect the public.

The article also explains how credit counseling companies consolidate their debts which is essentially a debt management plan or DMP. The way they work is that once a consumer agrees with the service, the credit counseling company will reach out and talk to the consumers lenders about rates and waiving fees. They then process the payments where the consumer just makes one payment to them a month.

But the article also shares that consumers might not automatically need a debt management plan. It is the job of the credit counselor to look at the specific situation of the consumer and be able to propose options so they can manage their debts. To read the full article, click

For the original version on PRWeb visit:

Utah’s commerce boss loses round to ex-aide, but fight isn’t over as her old feud with A.G.’s office resurfaces

(Francisco Kjolseth | The Salt Lake Tribune)
Francine Giani, Director of the Division of Consumer Protection in Salt Lake addresses the media, March 30, 2004, regarding the embattled Consumer Credit Counseling Service of Utah which has been issued a temporary restraining order. The Utah consumer debt fund came under investigation when it failed to send out client payments, used by about 1400 troubled Utahn consumers.

Do debt management plans work?

If borrowers make all the payments and repay the principal completely, debt management plans have much less impact on their credit scores than other types of debt relief.

Francine Bostick of Manhattan, Kan., paid off more than $120,000 in credit card debt in 2012. She says she emerged with credit scores good enough to buy her first-ever new car.

“It was exciting and made me a little nervous when they did the credit check,” says Bostick, 66. “We got 0 percent interest for the life of the loan.”

Yet Bostick is also an example of what may be wrong with credit counseling. Some consumer advocates were appalled when the National Foundation for Credit Counseling named Bostick and her husband, Jim, as the agency’s 2012 “Clients of the Year” because of the couple’s age and the fact that he had Alzheimer’s disease. Bostick worked 12-hour days to earn the money to make debt payments while caring for her increasingly incapacitated husband, who died in May. Critics say the Bosticks should have been encouraged to file for bankruptcy so Francine could have spent more time with her dying husband and used any extra money to shore up her own retirement savings.

Bostick said her credit counselor had told her she could file for bankruptcy, but Bostick didn’t consult a lawyer about that option.

“I still feel we made the right decision for us,” Bostick said. “I believe if we had filed (for) bankruptcy I would probably be in the same boat as a few people I know who filed (for) bankruptcy and are buried in debt again.”

The lack of disclosure about bankruptcy’s potential benefits isn’t the only problem with debt management plans. Other issues include:

o They aren’t designed to tackle many other types of debt, such as mortgages, car loans, student loans and most medical bills.

o Borrowers should expect to live without much access to credit during the repayment period. Their credit card accounts are typically closed and they agree to not apply for new credit, whether it’s for another card, a new car or a mortgage refinance. A new account appearing on their credit reports may lead creditors to cancel the debt management agreement.

o There’s little leeway for missed payments, which can lead to the plan’s cancellation.

Some people find that they simply can’t afford the payments on debt management plans, while others drop out because of setbacks such as job loss or unexpected expenses.

5 tips for bouncing back after a foreclosure or short sale

Philip and Denise Powell lost their home in 2011 after Philip’s hours as a pastor were cut in half and Denise was sidelined by a surgery. But they were determined to become homeowners again, so they rolled up their sleeves and got to work.

The Highland, Calif., couple got financial counseling. They took control of their credit reports, tackled high-interest debts and cut spending. In 2015, they bought another home.

“We thought we’d never recover,” Philip Powell says, recalling the devastation they felt after losing their home. “No one in California was ready for the crash; it hit us hard.”

Their story is typical of the more than 9.3 million homeowners — including 1.4 million in Florida — who lost a home through a distressed property sale from 2006 through 2014, according to the National Association of Realtors.

As rents rise, low mortgage rates persist and the economy gradually improves, some who lost their home in recent years will be able to re-enter the housing market. A 2015 study by the NAR found that 1.5 million previous homeowners might be eligible to buy within the next five years, based on the time it takes to boost credit scores and save for a down payment, as well as mandatory wait times to buy another house.


For those looking to put down homeownership roots once more, here are five tips:

?1. KNOW YOUR OPTIONS: You no longer have to wait seven years after a bankruptcy or foreclosure to buy another home, says Ray Carlisle, president of the national nonprofit NID Housing Counseling Agency. For homeowners who had extenuating circumstances such as prolonged income loss or major medical expenses, Fannie Mae has shortened its waiting periods to two years after a pre-foreclosure sale – a short sale or deed in lieu of foreclosure – and to three years after a foreclosure. That’s down from the standard waiting periods of four and seven years, respectively.

To get a Federal Housing Administration loan after a foreclosure, the standard wait time is now three years – and as little as one year with extenuating circumstances, says April Brown, a spokeswoman for the Department of Housing and Urban Development.

?2. CHANGE YOUR BAD MONEY HABITS: Focus on paying down debt, creating a solid savings strategy and avoiding new splurge purchases. Saving for a down payment and closing costs is one of the biggest hurdles that homebuyers face. Start socking away bonuses, windfalls, tax refunds and other extra cash in a savings account. Setting up automatic deposits to your savings account is another way to grow your down payment reserves, and it removes the temptation to spend money unnecessarily.

?3. REPAIR YOUR CREDIT: The FHA’s minimum credit score requirement for maximum financing is 580. Some lenders offer loans at that minimum, Carlisle says, but other mortgage lenders require a FICO score of 640 or higher. Paying off high-interest debt on time each month and not taking out new loans or running up your credit cards will help build your credit score. Also, ask your utility providers or landlord to report your on-time monthly payments to the major credit bureaus to have those count on your credit report, too.

?4. BEWARE OF PREDATORY LENDERS: If you encounter lenders that try to seduce you with “special” zero-down home loans or real estate agents who recommend rosy rent-to-own or land contract agreements, run the other way. Carlisle says that 80 percent of NID’s clients are minorities who are disproportionately targeted by predatory lenders. Never sign any contract you’re unsure of, and have a housing counselor , real estate attorney or different lender look it over to get a second opinion.

?5. SEEK HELP FROM THE PROS: Not only can housing counselors help you address credit issues and set up a savings plan, they can connect you with state, local and private resources that can ease your path to homeownership, Brown says.

NEXT STEPS: If you’re looking to buy again, reach out to a HUD-approved housing counselor before you begin. Also, the National Foundation for Credit Counseling provides help to more than 3 million people each year. Find an NFCC-certified housing counselor to discuss your options.