They could be friends down the pub or a mum at a school gate – the truth is more subtle than most people think
Muscle-bound, male, and prone to threats of violence, is the public image of a loan shark.
The truth is more subtle.
Laura Derbyshire, money advice coordinator for Salix Homes, which manages Salford’s 8,000 council homes, says the extent of illegal money lending across the city is ‘huge’.
She said: “It is one of those taboo subjects that people don’t like to talk about. People might not realise they have taken a loan from a loan shark. it could be the mum you talk to at the school gates.
“The biggest impact is on people’s health. They are worrying about the knock on the door. It is so intimidating to not feel safe in your own home.”
“It could be a grandad, the friend down the pub you have known for five years.”
In March this year foster mum, Sandra Dawn Lowe, of Hulme, Manchester, was jailed for three years after being convicted of 16 counts of illegal money lending.
One victim ended up paying back £125,000 over seven years after borrowing £30,000.
Laura Derbyshire from Salix Homes
Alec McFadden of Salford Credit Union, said: “It is often a middle-aged woman – she will have back up – but she will be the one knocking on the door – offering the loan. There will be no advertising – just word of mouth on who to go to for a loan.”
Ms Derbyshire said: “Loan sharks will threaten to take a victim’s car, take their bank cards and demand the pin number, so when cash is paid into an account they get it first.
“They will say ‘I know where your kids go to school. I know the way they walk home’.
“Because historically people in Salford don’t like to grass, they could be shouldering the burden of a loan shark on their own for a long time.
“A lot of it goes unreported. I think the two recent court cases in 2010 and 2013 involving Salford loan sharks were just the tip of the iceberg.
“The biggest impact is on people’s health. They are worrying about the knock on the door. It is so intimidating to not feel safe in your own home.
“It is a growing industry and more needs to be done to educate people that it is criminal behaviour. We need to start educating people at high school level of the dangers of falling into this cycle.
“The most important thing is to ask for help. If speaking out is going to risk putting one of our tenant’s at harm we would look at moving them.
“We have a specialist money advice team so we can help our tenants find a way out.”
Case Study: Loan shark victim left on brink of suicide
Matthew faced a stark choice after two years where his life had been ruled by an illegal money lender.
He sat in his living room with enough painkillers on the arm of his chair to kill himself.
In his hand, was the phone.
“I am so glad I made that call. Without the Illegal Money Lending Team I would not be here today.”
“It was a choice between ending my life and calling for help,” said Matthew.
“I decided I couldn’t leave my family so I called the Illegal Money Lending Team.”
The loan shark who had led him to the brink of suicide was arrested and prosecuted.
Matthew’s slide into despair started with a £20 loan to buy his family food.
It got out of control until he was borrowing £200 every fortnight and paying back £300 – most of his benefits.
The spiral of debt ended with him borrowing £900 and being told he owed £3,000.
In an attempt to shake off the loan shark, he sold his car, went without food, and borrowed £2,000 from family.
The lender turned up at his home after midnight, banging on his door demanding cash, and threatened to put in his windows.
Then he made him sit petrified in the back of a car with ex-boxers either side while he threatened him.
Matthew called the lender ‘Dr Jekyll’ as he seemed helpful at first, having befriended his disabled wife. But he turned vicious when challenged about the payments.
He said: “I am so glad I made that call. Without the Illegal Money Lending Team I would not be here today.
“They never judged me. It was like getting an extra family who looked after me. They were in touch all the time to check I was OK and helped me set my finances straight.
“I cannot stress enough how important it is that anyone in the same situation as me makes the call. It’s best thing I ever did.”
Case Study: Elderly disabled couple were ripped off by loan shark
PENSIONERS Bob and Doris turned to a ‘friend’ when they hit severe financial trouble.
They had known Jody since she was 14, and trusted both her and her husband.
Living on disability living allowance benefits, they were struggling to pay bills and other debts.
They borrowed £18,000 from Jody’s husband. He told the couple, from Manchester, that the money was a bank loan he had secured.
But they never saw any paper work, despite asking for it.
The loan went up to £23,000, then £32,000.
Jody’s husband – a loan shark – just told them the bank added interest every April.
Doris went to the post office every Monday and drew out £250 to pay him.
Struggling emotionally with the trap she was in, Doris finally got help and the Illegal Money Lending Team stepped in.
Tragically, Doris was so used to paying out cash she asked her liaison officer how much it would cost for help, and was told it was free.
The loan shark had told Bob – who was very ill – that it didn’t matter who died first, he still wanted his money from the other one.
Investigators found that Doris and Bob had paid the loan shark £27,000 from their benefits over two years.
They visited the loan shark and his wife, and told them if they continued to collect money from the couple they would be arrested.
In 2013, the Birmingham-based Illegal Money Lending Team in England made 100 arrests, which led to 50 prosecutiuons.
It has 30 specialist investigators who move to an area once a suspected illegal money lender is identified.
An estimated 310,000 households in the country are borrowing from illegal money lenders.
The highest interest charged was calculated at 131,000 per cent APR.
Cash obtained by IMLT from loan sharks through Proceeds of Crime Act is ploughed back into campaigns to raise awareness of the issue.
In Salford, a music project was funded with cash confiscated from illegal lenders.
Salford Music Foundation’s song writing competition was one of five projects to receive funding.
The winning song ‘Bite The Hand That Feeds’ by singer/songwriter Dominic Williams was turned into a video to reflect the desperation of victims.
Loan sharks 'no longer just men threatening violence'
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Today, the Federal Home Loan Bank of Seattle (Seattle Bank) announced
preliminary financial highlights for the three and nine months ended
September 30, 2014, reporting $15.3 million and $40.8 million of net
income, compared to $21.2 million and $47.6 million for the same periods
in 2013, and an increase in its retained earnings balance to $327.2
million as of September 30, 2014, from $287.1 million as of December 31,
Based on the bank’s third quarter 2014 financial results, the Seattle
Bank’s Board of Directors declared a $0.025 per share cash dividend, to
be paid on October 31, 2014. Dividends will be paid based on
average Class A and Class B stock outstanding during third quarter 2014.
In addition, the bank announced that it will repurchase up to $100
million of excess capital stock during fourth quarter 2014. The Seattle
Bank repurchased $98.5 million and $296.9 million of excess capital
stock during the three and nine months ended September 30, 2014.
“We’re pleased that the Seattle Bank has remained profitable and that it
continues to grow its retained earnings, which is its principal form of
loss-absorbing capital,” stated Seattle Bank President and CEO Michael
L. Wilson. “But advance demand remains tepid, and as a consequence, the
bank continues to rely primarily on investments to drive its net income.
This is one of the reasons that the proposed merger with the Federal
Home Loan Bank of Des Moines is a strategically attractive option for
Key features of the Seattle Bank’s operating results for the three and
nine months ended September 30, 2014, included:
Higher net interest income. Net interest income after provision
(benefit) for credit losses for the three and nine months ended
September 30, 2014, increased to $40.5 million and $105.4 million,
from $36.4 million and $105.1 million for the same periods in 2013,
primarily due to increased interest income on investments and lower
cost of funding partially offset by lower interest income on mortgage
loans held for portfolio and advances. The changes in interest income
on investments and advances were primarily yield driven. Additionally,
lower prepayment fees on advances contributed to a decrease in
interest income. The change in interest income on mortgage loans held
for portfolio was primarily driven by the continued decline in the
average balances outstanding during the three- and nine-month periods
ended September 30, 2014, as the remaining mortgage loans in the
portfolio continued to pay down.
Lower non-interest income (loss). Non-interest income (loss)
decreased $5.1 million and $3.0 million for the three and nine months
ended September 30, 2014, compared to previous periods. Non-interest
income (loss) was negatively impacted by higher credit-related losses
on other-than-temporarily impaired private-label mortgage-backed
securities and lower gains on derivative and hedging activities and
early debt extinguishments during the three and nine months ended
September 30, 2014, compared to the previous periods.
Higher other non-interest expense. The Seattle Bank’s other
non-interest expense increased $5.5 million and $4.8 million for the
three and nine months ended September 30, 2014, compared to the same
periods in 2013, due to an increase in compensation and benefits and
other operating expenses. Included in operating expenses for the three
months ended September 30, 2014, is $3.3 million of merger-related
costs. The increase on a year-to-date basis was partially offset by
the impact of a one-time $4.0 million write-off of software during the
second quarter of 2013 without similar activity in 2014.
Other Financial Information
Total assets decreased to $35.0 billion as of September 30, 2014, from
$35.9 billion as of December 31, 2013.
Advances outstanding decreased to $10.2 billion as of September
30, 2014, from $10.9 billion as of December 31, 2013, primarily due to
the maturity of advances with Bank of America, N.A., in the first
quarter of 2014, partially offset by an increase in advances in the
second and third quarters of 2014.
Mandatorily redeemable capital stock decreased by $204.2 million as of
September 30, 2014, compared to December 31, 2013, primarily due to
the Seattle Bank’s repurchases of excess capital stock during the
first three quarters of 2014, partially offset by a redemption request
resulting from a merger between two members.
Accumulated other comprehensive income (loss) improved to a gain of
$23.7 million as of September 30, 2014, from a loss of $71.8 million
as of December 31, 2013, primarily due to improvements in the market
values of the bank’s available-for-sale securities including those
previously determined to be other-than-temporarily impaired.
Total capital increased to $1.2 billion as of September 30, 2014, from
$1.1 billion as of December 31, 2013.
The Seattle Bank paid cash dividends (including interest on
mandatorily redeemable capital stock) totaling $644,000 and $2.0
million during the three and nine months ended September 30, 2014.
During the three months ended September 30, 2013, the Seattle Bank
paid cash dividends of $683,000. No cash dividends were paid during
the first half of 2013.
Unaudited Selected Financial Data ($ in thousands)
Selected Statements of Condition Data
As of September 30, 2014
As of December 31, 2013
Mortgage loans held for portfolio, net
Mandatorily redeemable capital stock
Total capital stock
Accumulated other comprehensive income (loss)
Total capital (2)
For the Three Months Ended
For the Nine Months Ended
Selected Statements of Income Data
Net interest income
Provision (benefit) for credit losses
Net interest income after provision (benefit) for credit losses
Non-interest income (loss):
Other-than-temporary impairment credit loss
Derivatives and hedging activities
Other non-interest income (loss) (3)
Other non-interest expense
Selected Performance Measures
As of September 30, 2014
As of December 31, 2013
Regulatory capital (4)
Risk-based capital surplus (5)
Regulatory capital-to-assets ratio
Leverage capital-to-assets ratio
Market value of equity (MVE) to par value of capital stock (PVCS)
Return on PVCS vs. one-month London Interbank Offered Rate (LIBOR) (6):
Return on PVCS
Average annual one-month LIBOR
Core mission activity (CMA) assets to consolidated obligations (7)
Consists of securities purchased under agreements to resell, federal
funds sold, available-for-sale securities, and held-to-maturity
Excludes mandatorily redeemable capital stock, which totaled $1.5
billion and $1.7 billion as of September 30, 2014 and December 31,
Depending upon activity within the period, may include the
following: gain (loss) on sale of available-for-sale or
held-to-maturity securities, gain (loss) on financial instruments
held under fair value option, gain (loss) on early extinguishments
of consolidated obligations, service fees, and other non-interest
Includes total capital stock, retained earnings, and mandatorily
redeemable capital stock.
Defined as the excess of the bank’s permanent capital (which
consists of Class B capital stock, including Class B capital stock
classified as mandatorily redeemable, and retained earnings) over
its risk-based capital requirement.
Return on PVCS is computed as year-to-date net income divided by
year-to-date average PVCS, annualized. Average annual one-month
LIBOR is the year-to-date average one-month LIBOR.
Defined as advances, acquired member assets (such as mortgage
loans), and certain housing finance agency obligations as a
percentage of consolidated obligations.
The Seattle Bank expects to file its third quarter 2014 quarterly report
on Form 10-Q with the Securities and Exchange Commission (SEC) on or
around November 6, 2014.
Proposed Merger with the Des Moines Bank
On September 25, 2014, the Seattle Bank and the Federal Home Loan Bank
of Des Moines (Des Moines Bank) entered into a definitive agreement to
merge the two banks. Material details of the merger agreement are
included in the banks’ related Form 8-K filings with the SEC. The next
step in the process is for the banks to submit a merger application to
the Federal Housing Finance Agency (FHFA). Following regulatory approval
of the merger application, the Seattle and Des Moines Banks’ members
will receive detailed information about the proposed merger. The
proposed merger must be ratified by the members of both banks through a
voting process that is expected to occur in the first half of 2015.
The Seattle Bank continues to address the requirements of the Consent
Order issued by the FHFA, effective November 22, 2013 (collectively,
with related understandings with the FHFA, the Amended Consent
Arrangement), which superseded the previous Consent Order and related
understandings put in place in October 2010 (2010 Consent Arrangement).
In addition to continued compliance with the terms of the plans and
policies adopted and implemented to address the 2010 Consent
Arrangement, the Amended Consent Arrangement requires development and
implementation of a plan acceptable to the FHFA to increase advances and
other CMA assets as a percentage of the bank’s consolidated obligations,
Board of Directors’ monitoring for compliance with the terms of such
plans and policies, and continued non-objection from the FHFA prior to
repurchasing or redeeming any excess capital stock or paying dividends
on the bank’s capital stock. With FHFA non-objection, the Seattle Bank
has repurchased up to $25 million of excess capital stock on a quarterly
basis since the third quarter of 2012 and paid modest quarterly
dividends to its shareholders based on the bank’s quarterly net income
since July 2013. In addition to the three quarterly repurchases of up to
$25 million of excess capital stock, with FHFA non-objection, during the
first nine months of 2014, the Seattle Bank redeemed an additional
$224.6 million of excess capital stock on which the redemption waiting
periods had been satisfied. The FHFA reviews the bank’s requests to
repurchase and pay dividends on its capital stock on a quarterly basis.
About the Seattle Bank
The Seattle Bank is a financial cooperative that provides liquidity,
funding, and services to enhance the success of its members and support
the availability of affordable homes and economic development in the
communities they serve. The Seattle Bank’s funding and financial
services enable our member institutions to provide their customers with
greater access to mortgages, commercial loans, and funding for
affordable housing and economic development.
The Seattle Bank is one of 12 Federal Home Loan Banks in the United
States. The Seattle Bank serves Alaska, Hawaii, Idaho, Montana, Oregon,
Utah, Washington, and Wyoming, the U.S. territories of American Samoa
and Guam, and the Commonwealth of the Northern Mariana Islands. Members
include commercial banks, credit unions, thrifts, industrial loan
corporations, insurance companies, and non-depository community
development financial institutions.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including preliminary highlights of financial statements and information
as of and for the three and nine months ended September 30, 2014, and
information regarding a potential merger with the Des Moines Bank.
Forward-looking statements are subject to known and unknown risks and
uncertainties. Actual financial performance and condition for the three
and nine months ended September 30, 2014, and other actions or
transactions, including those relating to the ability of the Seattle
Bank and the Des Moines Bank to obtain FHFA and member approvals
relating to the proposed merger, the completion of the proposed merger,
and the Amended Consent Arrangement and payments of dividends and
repurchases of shares, may differ materially from those expected or
implied in forward-looking statements because of many factors. Such
factors may include, but are not limited to, finalization of the
financial statements, regulatory and legislative actions and approvals
(including those of the FHFA relating to the stock repurchases,
dividends and the proposed merger), the ability to obtain the required
approvals from the banks’ members relating to the proposed merger, the
ability of the parties to complete a transaction pursuant to the terms
of the merger agreement, changes in general economic and market
conditions (including effects on, among other things, U.S. debt
obligations and mortgage-related securities), demand for advances,
changes in the bank’s membership profile or the withdrawal of one or
more large members, shifts in demand for the bank’s products and
consolidated obligations, business and capital plan and policy
adjustments and amendments, competitive pressure from other Federal Home
Loan Banks and alternative funding sources, the Seattle Bank’s ability
to meet adequate capital levels, accounting adjustments or requirements
(including changes in assumptions and estimates used in the bank’s
financial models), interest-rate volatility, changes in projected
business volumes, the bank’s ability to appropriately manage its cost of
funds, changes in the bank’s management and Board of Directors, and
hedging and asset-liability management activities. Additional factors
are discussed in the Seattle Bank’s most recent annual report on Form
10-K, subsequent quarterly reports on Form 10-Q, and other filings made
with the Securities and Exchange Commission. The Seattle Bank does not
undertake to update any forward-looking statements made in this
Members of the Seattle Bank will be provided a Disclosure Statement
in connection with the anticipated member vote on the ratification of
the merger agreement. Members are urged to read the Disclosure Statement
carefully when it becomes available.
FinanceInvestment & Company Informationinterest incomeSeattle
Federal Home Loan Bank of Seattle
Connie Waks, 206-340-2305
Federal Home Loan Bank of Seattle Announces Third Quarter 2014 Unaudited Preliminary Financial Highlights
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Continue here: InstaLoan Now Offers 150 Instant Cash Locations
If you need access to cash and have equity in your home, a home equity loan or line of credit can be a perfect solution. There are two types of home equity loans: a fixed-rate loan for a specified amount or a variable-rate line of credit, or HELOC. Depending on your uses and need for the funds, one of these may work better than the other. Interest paid on either loan, like the interest on your first mortgage, is also tax-deductible.
If you choose a HELOC to meet your funding needs, you may borrow up to $100,000 and deduct the interest from your income taxes. For this reason, HELOCs are an attractive way to pay off credit cards and other loans, or to pay for tuition. HELOC rates are only slightly higher than first mortgage rates, making them much lower than other loan options. Similar to a credit card, the interest rate is variable and applicable to the outstanding balance. Sometimes, a HELOC features an option to lock in a fixed interest rate to repay the outstanding balance.
The homeowner may borrow up to a specified amount based on the combined loan-to-value ratio, which includes the outstanding balance from a first mortgage plus the additional requested funds. Generally, the combined loan-to-value ratio for a HELOC cannot exceed 90%. However, some lenders loan up to 125%. If you are selecting one of these loans, any interest on a balance that exceeds the home’s value cannot be tax-deductible. These higher-LTV loans assess higher fees and put you at a higher risk.
Is the interest on a home equity line of credit (HELOC) tax deductible?
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* IMF $2.7 bln loan tranche unlikely in 2014
* Kiev in dire need of cash to pay gas bills
* Minister says gas deal with Russia unlikely on Wednesday
By Natalia Zinets
KIEV, Oct 28 (Reuters) – Ukraine is unlikely to receive a second tranche of a $17-billion loan programme from the International Monetary Fund this year as expected, Finance Minister Oleksander Shlapak said on Tuesday, in the latest economic blow to the debt-ridden country.
Ukraine, which has been fighting pro-Russian separatists in its east and struggling to resolve a months-long gas pricing dispute with Moscow, badly needs cash to support its budget, pay off debts and prop up its faltering hryvnia currency.
Kiev had expected that a second tranche, worth $2.7 billion, of the IMF bailout would come in December after the Fund’s mission was due later this month. But Shlapak said an IMF visit was unlikely before a new government was formed.
President Petro Poroshenko hailed a sweeping victory for pro-Europe parties in parliamentary election on Sunday, but it may take a month or more before a new cabinet takes over.
“An (IMF) mission will come when a new government is in place,” Shlapak told journalists. “They want to talk to a new government. The key question would be the adoption of a realistic 2014 budget.”
He added that most likely, the tranche would be postponed until next year.
“The maximum that we would like to achieve is to get an IMF decision (on the tranche disbursement this year),” he said.
The mission will also decide how much additional financial aid Kiev may need, after warning in September that if Ukraine’s conflict with the separatists runs into next year, the country may need as much as $19 billion in extra aid.
The delay of the disbursement means that Kiev can only count on 760 million euros in aid from the European Union this year.
Ukraine’s finance ministry says it has enough funds to cover its external debt obligations until the end of January, but Kiev has asked Europe for an additional $2 billion euros to cover its gas company Naftogaz’s bills for the current heating season.
“The plan envisages purchases of a maximum 7 billion cubic metres of gas by the end of this heating season,” Shlapak said. “Naftogaz does not want to err and therefore we’re working on additional funding, we’re asking everyone we can.”
Russian President Vladimir Putin said on Friday he hoped Moscow and Kiev would finally reach a deal to end their gas dispute, in which Moscow has halted supplies to Ukraine.
The Russian and Ukrainian energy ministers are expected to hold talks with the European Commission in Brussels on Wednesday over Ukraine’s unpaid bills and the price Kiev pays for its gas.
Shlapak said a deal there was unlikely.
“I have the impression that the Russian side does not want to negotiate,” he said. “The conditions that are proposed do not stand up to criticism.”
Putin has appealed to the West to help Ukraine raise funds to pay for its gas supplies, adding that Kiev already owed Moscow $4.5 billion for deliveries last year and this.
Ukraine must pay $3.1 billion of that by the end of the year, which could cause a huge dent in the country’s gold and foreign reserves. They currently stand at $16 billion.
(Writing by Lidia Kelly, editing by Elizabeth Piper and Gareth Jones)
Politics & GovernmentBudget, Tax & EconomyUkraineInternational Monetary Fund
Ukraine unlikely to receive IMF loan tranche this year – finance minister
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IRVINE, CA–(Marketwired – Oct 28, 2014) – Network Capital Funding, an award-winning national full-service leader in mortgage lending, is proud to continue its ongoing sponsorship of “The Mortgage Radio Show.” Launched in 2009, “The Mortgage Radio Show” is a popular podcast that delivers useful updates on mortgage rates, negotiating terms, working through the loan process, and other helpful information. Whether the topic is purchasing a first home, refinancing for a lower payment/term, or pulling cash from home equity, “The Mortgage Radio Show” provides experienced, professional advice. Co-hosts of the show include Emmy-winning writer and well-known radio personality Teresa Strasser and mortgage expert Sean Meador. Strasser’s credits include co-host on “The Adam Carolla Show,” “Win Ben Stein’s Money,” and TLC’s “While You Were Out.” Sean Meador, with over ten years’ experience, has become one of the top performing producers in the mortgage industry. He advises listeners on the mortgage loan process, loan programs, and credit qualifications, such as first and second mortgages, as well as numerous government programs. He loves the close relationships he develops with clients while helping them to save money and accomplish their mortgage goals.
With mortgage rates at their lowest in over 50 years, anyone who owns a home or is looking to buy one is the prime audience for “The Mortgage Radio Show.” Everyone should have the opportunity to take advantage of low rates and the radio show offers great advice on how one, regardless of lifestyle or living situation, might improve his or her financial outlook.
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Network Capital Funding Blog: http://www.NetworkCapitalFundingNews.com
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Mortgage Experts at Network Capital Funding Renews Sponsorship of The Mortgage Radio Show