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Fitch Affirms Nelnet Student Loan Trust 2007-2 Senior & Sub Notes; Outlook Stable

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings affirms the Nelnet Student Loan Trust 2007-2 senior notes at ‘AAAsf’ and the subordinate notes at ‘Asf’. The Rating Outlook remains Stable for both classes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch’s opinion, based on the guarantees provided by the transaction’s eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch rates the U.S. sovereign government at ‘AAA’ with Outlook Stable.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust’s asset balance over bond balance) and excess spread, and for the senior notes, subordination of the class B notes. As of November 2014, total parity is 100.13% (0.13% CE) and senior parity is 109.96% (9.06% CE). The trust has been releasing cash.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund sized at the greater of 0.25% of the pool balance and $2,201,253, currently equal to the floor.

Acceptable Servicing Capabilities: National Education Loan Network, as master servicer, and Nelnet Inc, as subservicer, are responsible for day-to-day servicing of the trust. Fitch believes both National Education Loan Network and Nelnet Inc. to be acceptable servicers of FFELP student loans.

RATING SENSITIVITIES

Since the FFELP student loan ABS relies on the U.S. government to reimburse defaults, ‘AAAsf’ FFELP ABS ratings will likely move in tandem with the ‘AAA’ U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch’s published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has affirmed the following ratings:

Nelnet Student Loan Trust 2007-2:

–Class A-3L at ‘AAAsf’; Outlook Stable;

–Class A-4 AR-1 at ‘AAAsf’; Outlook Stable

–Class A-4 AR-2 at ‘AAAsf’; Outlook Stable;

–Class B1 at ‘Asf’; Outlook Stable;

–Class B1 at ‘Asf’; Outlook Stable.

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (Aug. 4, 2014);

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’ (June 23, 2014);

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions’ (Oct. 31, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=981221

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

FinanceInvestment & Company InformationFitch Ratings Contact:

Fitch Ratings

Primary Analyst:

Eric Orenstein, +1-212-908-0245

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Committee Chairperson:

Tracy Wan, +1-212-908-9171

Senior Director

or

Sandro Scenga, +1-212-908-0278

Media Relations, New York

sandro.scenga@fitchratings.com […]

Cash Advance

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About Cashadvance.comCashAdvance.com has been America’s most trusted resource for cash advances since 1997, connecting millions of consumers to reliable lenders each year. While you have many other channels through which to obtain emergency cash quickly, what makes working with CashAdvance.com so much better?Free and Unlimited UseOur service is always free to the customer whether or not your request is matched with a lender. Additionally, new and returning customers are welcome to utilize our service as much as they need. We dont believe in restriction or practicing bad business tactics.In many cases, customers come to CashAdvance.com after having a bad experience with another online matching service. One of the most common complaints we hear is that another organization either tried or succeeded in making the customer pay just to use a matching service. We would never imagine charging our customers, especially in their time of need.More Lenders. More Choices.In a loan request matching service, you want as many qualified lenders as possible reviewing your information, in the shortest amount of time. CashAdvance.com has the largest network of qualified lenders, so that we can assist in helping to find you the best opportunity and rates for your Cash Advance.Unlike the time and effort made in traveling to different storefront Cash Advance locations, our customers find our online experience to be both easy and quick with more lender choices. Plus, we choose lenders that are consistent with the kind of experience we want our customers to have.Data ProtectionCashAdvance.com is certified by two entirely separate services to ensure that your personal information is secure at all times. In order to protect your information from hackers, we are tested every day, both by McAfee and Norton.We are a proud member of the Online Lenders Alliance (OLA), a national organization dedicated to promoting best practices in the online lending industry. Moreover, we abide by the Federal Trade Commission Act, the Financial Services Modernization Act, the Fair Credit Reporting Act and all other applicable federal laws, including all laws relating to privacy and data protection.Positioned for TrustThe online lending industry has many businesses seeking to take advantage of your urgent need to obtain funds quickly, charging borrowers excessive fees with unreasonably stringent terms attached. Back in the beginning, our organization made a commitment to be upfront, honest and ethical in dealing with customers. We knew that long-term relationships, even if they didnt always result in a match, were far better than pushing customers to something they didnt want.Customers refer their friends and family to CashAdvance.com because in times of need, people want to be treated with respect and work through matters quickly. Plus, we have great agents to help you with questions throughout the process.About this appThis app provides a convenient and easy way to utilize cashadvance.com’s services.It is easy to navigate and provides additional information from cashadvance.com.*This app is provided by a third party affiliate of cashadvance.com. All trademarks and copyrights belong to cashadvance.comContent rating: Everyone

Price0LicenseFreeFile Size1.32 MBVersion1.0Operating System Android System RequirementsCompatible with 2.3.3 and above. […]

3 Signs Your 'Loan' Is Really a Scam

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[This week is National Consumer Protection Week and so The ABC News Fixer is here to share tips all week long to help keep your money safe in some common financial situations. Check The ABC News Fixer homepage at ABCNews.com/Fixer for these and many, many more financial tips.]

What kind of crook would take money from a poor person?

In one of the most despicable – but unfortunately, common – scams, con artists are offering bogus loans to people with poor credit histories who need cash to pay their bills.

It’s called an “advance-fee loan” but it’s not a loan at all. It’s a scam.

These schemes can be quite sophisticated, using fancy websites, loan applications and even fake “loan officers” who are really just in on the scheme. After the scammers collect an upfront payment from the borrower, they disappear – leaving the consumer in even worse financial shape.

The ABC News Fixer has heard from numerous victims of this scam.

Make sure you don’t fall for it by noting these three red flags:

The supposed lender doesn’t seem to care about your credit history. The lender guarantees you’ll get a loan, no matter what. The lender claims that you’ve been approved for a loan, but then starts demanding fees upfront for vague reasons like “insurance,” “processing” or “paperwork.”

The

Federal Trade Commission

says a demand for any upfront fee is a clue to walk away.

If you need to borrow money, be sure to deal only with legitimate lenders that disclose all their fees clearly and conspicuously.

A legitimate lender will take its fees from the amount that you borrow – and not ask you to give them your own money in advance to get a loan.

If you have poor credit, you’ll have a hard time getting a legitimate loan. You’ll need to put in time and effort to rebuild your credit history. If you’re falling behind on your bills, contact your creditors to ask for help and consider getting assistance from a nonprofit credit counseling service.

– The ABC News Fixer

Got a consumer problem? The ABC News Fixer may be able to help. Click here to submit your problem online. Letters are edited for length and clarity.

[…]

Fitch Rates KHESLC 2015-1

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings assigns the following rating to the Kentucky Higher Education Student Loan Corporation series 2015-1 (KHESLC 2015-1) student loan asset-backed notes:

–$134,605,000 2015-1 notes ‘AAAsf’; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of Federal Family Education Loan Program (FFELP) loans, including approximately 50.2% of rehab loans, with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest.

Sufficient Credit Enhancement: Cash flow scenarios for class A notes were satisfactory under Fitch stresses. At closing, total parity is expected to be 104.0%. Total credit enhancement (CE) is provided by overcollateralization (OC) and excess spread.

Adequate Liquidity Support: Liquidity support for the 2015-1 notes is provided by a $336,513 reserve fund and a $3.5 million capitalized interest account both of which will be funded with note proceeds at closing.

Acceptable Servicing Capabilities: KHESLC will service the entire 2015-1 portfolio, and Nelnet Servicing LLC will be the backup servicer. Fitch believes that both servicers are acceptable servicers of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, ‘AAAsf’ FFELP ABS ratings will likely move in tandem with the ‘AAA’ U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch’s published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades. For further discussion of Fitch’s sensitivity analysis, please see the presale titled ‘KHESLC 2015-1’, dated Feb. 5, 2015.

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (August 2014);

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’ (June 2014);

–‘Representations, Warranties and Enforcement Mechanism in Global Structure Finance Transactions’ (October 2014).

Applicable Criteria and Related Research:

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980439

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

FinanceInvestment & Company InformationFitch Ratingsstudent loan Contact:

Fitch Ratings

Primary Analyst

Nicole Edwards, +1-212-908-9114

Director

Fitch Ratings, Inc.

33 Whitehall

New York, NY 10004

or

Secondary Analyst

Harry Kohl, +1-212-908-0837

Associate Director

or

Committee Chairperson

Tracy Wan, +1-212-908-9171

Senior Director

or

Media Relations

Sandro Scenga, New York, +1-212-908-0278

sandro.scenga@fitchratings.com […]

Fitch Affirms PHEAA Student Loan Trust 2014-1

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings has affirmed the PHEAA Student Loan Trust 2014-1 senior note at ‘AAAsf’ and subordinate note at ‘Asf’. The Rating Outlook remains Stable for both classes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) loans, including approximately 12% rehabilitated (rehab) FFELP loans. The credit quality of the trust collateral is high, in Fitch’s opinion, based on the guarantees provided by the transaction’s eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. The current U.S. sovereign rating is ‘AAA’ with a Stable Outlook.

Sufficient Credit Enhancement (CE): While both the senior and subordinate notes will benefit from overcollateralization (OC) and future excess spread, the senior notes also benefit from subordination provided by the class B note. As of December 2014, total parity is 100.93% (0.92% CE) and senior parity is 103.96% (3.81% CE). Cash will be released from the trust given that the specified OC amount (the greater of 1.54% of the adjusted pool balance or $5.8 million) is maintained.

Adequate Liquidity Support: Liquidity support for note is provided by a reserve account. The reserve is sized equal to the greater of 0.25% of pool balance and $837,743.

Acceptable Servicing Capabilities: Pennsylvania Higher Education Assistance Agency as servicer, will be responsible for servicing the portfolio. Fitch has reviewed the servicing operations of Pennsylvania Higher Education Assistance Agency and believes it to be acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, ‘AAAsf’ FFELP ABS ratings will likely move in tandem with the ‘AAA’ U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch’s published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

A comparison of the transaction’s representations, warranties, and enforcement mechanisms (RW&Es) to those of typical RW&Es for FFELP asset-backed securities is available in the presale appendix. This presale appendix and Fitch’s special report on ‘Representations, Warranties, and Enforcement Mechanisms on Global Structured Finance Transactions,’ may be accessed via the links provided below.

Fitch has taken the following rating actions:

PHEAA Student Loan Trust 2014-1:

–Class A affirmed at ‘AAAsf’; Outlook Stable;

–Class B affirmed at ‘Asf’; Outlook Stable.

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (May 20, 2014);

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’ (June 23, 2014);

–‘PHEAA Student Loan Trust 2014-1 — Appendix’ (Feb. 24, 2014);

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions’ (Oct. 31, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

PHEAA Student Loan Trust 2014-1 — Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736636

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980266

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

FinanceInvestment & Company InformationFitch Ratings Contact:

Fitch Ratings

Primary Analyst

Paul Jiang

Analyst

+1-212-908-9120

Fitch Ratings, Inc.

33 Whitehall St.

New York, NY 10004

or

Committee Chairperson

Tracy Wan

Senior Director

+1-212-908-9171

or

Media Relations:

Sandro Scenga, +1-212-908-0278

sandro.scenga@fitchratings.com […]

Fitch Upgrades SLM Student Loan Trust 2013-2 Sub Notes

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings affirms the ‘AAAsf’ rating on the senior notes and upgrades to ‘AAsf’ from ‘A+sf’ the subordinate notes issued by SLM Student Loan Trust 2013-2. The Rating Outlook remains Stable for the senior and subordinate notes. A detailed list of rating actions follows at the end of this press release.

KEY RATING DRIVERS

High Collateral Quality: The collateral consists of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch’s opinion, based on the guarantees provided by the transaction’s eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch currently rates the U.S. sovereign ‘AAA’ with a Stable Outlook.

Sufficient Credit Enhancement (CE): While both the senior and subordinate notes will benefit from overcollateralization (OC; the excess of trust’s asset balance over bond balance) and excess spread, the senior notes also benefit from subordination provided by the class B note. As of January 2015, total parity is 101.01% (1.00% CE) and senior parity is 104.64% (4.44% CE). Cash is being released from the trust given that the target OC level of the greater of 1.00% of the adjusted pool balance and $2,000,000 has been maintained. The subordinate notes have been upgraded to ‘AAsf’ from ‘A+sf’ to reflect the trust’s ability to pass the respective rating’s cash flow stresses.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund sized at the greater of 0.25% of the pool balance and $1,248,458.

Acceptable Servicing Capabilities: Navient, formerly Sallie Mae, Inc., is responsible for day-to-day servicing of the trust. Fitch believes Navient is an acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, ‘AAAsf’ FFELP ABS ratings will likely move in tandem with the ‘AAA’ U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch’s published stresses could result in future downgrades. Likewise, a buildup of CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Initial Key Rating Drivers and Rating Sensitivity further described in the presale report published on April 2, 2013.

Fitch has taken the following rating actions:

SLM Student Loan Trust 2013-2:

–Class A notes affirmed at ‘AAAsf’; Outlook Stable;

–Class B notes upgraded to ‘AAsf’ from ‘A+sf’; Outlook Stable.

A comparison of the transaction’s RW&Es to those of typical RW&Es for student loans is available by accessing the reports and links below:

–‘SLM Student Loan Trust 2013-2 – Appendix’, dated April 2, 2013;

–‘Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions — Amended’, dated April 17, 2013.

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ dated August 2014;

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’ dated June 2014.

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=980257

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

FinanceInvestment & Company InformationFitch Ratings Contact:

Fitch Ratings

Primary Analyst

Jeffrey Prackup

Director

+1 212-908-0839

Fitch Ratings. Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Paul Jiang

Analyst

+1 212-908-9120

or

Committee Chairperson

Tracy Wan

Senior Director

+1 212-908-9171

or

Media Relations:

Sandro Scenga, +1 212-908-0278

sandro.scenga@fitchratings.com […]

As more seniors rely on reverse mortgages, troubles beckon for heirs

A new government report shows many seniors are taking out reverse mortgages on their homes without fully understanding the ramifications, leading to foreclosures among borrowers and a tangle of problems for heirs after the borrower dies.

“Consumer complaints tell us that the complex terms of reverse mortgages continue to be misunderstood,” said Richard Cordray, director of the Consumer Financial Protection Bureau, which just released a report highlighting the top complaints the agency received about reverse mortgages over the last three years.

A reverse mortgage is a type of loan that allows homeowners age 62 and older to tap a portion of the equity in their homes. The money typically is paid out in a lump sum or in regular fixed payments, with fees and interest added to the balance each month. Unlike a home equity loan, the money does not have to be repaid until the borrower dies, moves out or sells the home.

The loans can be a life line for house-rich, cash-poor seniors struggling with daily living expenses. Reverse mortgages also have been used to help retirees improve their lifestyles, allowing them to buy the summer home they had always dreamed about, for example.

But problems and confusion are expected to continue as more baby boomers retiring with little or no savings turn to the loans for help getting by.

The Consumer Financial Protection Bureau cited a 2010 Federal Reserve report concluding that in the 55-to-64 age group, 41 percent had no retirement savings. Even among those who had a nest egg, the average balance was only $103,200, the report said.

Many complaints that the protection bureau received showed people were confused about the way reverse mortgages work.

“Many consumers struggle with understanding how quickly their loan balance will go up and their home equity will fall,” the report said. As a result, many borrowers who wanted to refinance their loans were frustrated because there wasn’t enough remaining equity in their homes.

One of the most common types of complaints involved the inability of a borrower’s family members to assume the loan in order to keep the house when the borrower died, according to the report.

Reverse mortgages prohibit loan assumptions because actuarial tables are used to help determine the loan amounts. Adult children may keep the home only by paying off the loan or by paying 95 percent of the current appraised value of the house.

Those rules can present problems for multigenerational households when family members are living in the home at the time of the borrower’s death.

Heirs also complained about what they believed were inflated appraisals that required them to pay more than they expected, the report said.

Another common complaint involved the shock of having to sell a home or face foreclosure when a spouse died because the surviving spouse’s name was not on the reverse mortgage. Some couples were advised to take a reverse mortgage in the older spouse’s name to qualify for a bigger loan.

“Some consumers report that their loan originator falsely assured them they would be able to add the other spouse to the loan at a later date,” the report said.

To help more seniors stay in their homes, the U.S. Department of Housing and Urban Development — which insures most reverse mortgages through its Home Equity Conversion Mortgage program — implemented a new rule allowing surviving spouses who meet certain conditions to remain in the home regardless of their borrowing status.

The rule only applies to reverse mortgages originated through HUD’s program after Aug. 4, 2014.

The financial protection bureau also reported a number of complaints from borrowers who faced foreclosure or who lost their homes because they did not keep up with payments for property taxes and homeowners’ insurance, which under terms of a reverse mortgage must be kept current.

“Some consumers describe unsuccessful attempts to halt foreclosure proceedings by paying overdue taxes in full or through payment plans,” the report said.

In an effort to stem such defaults, lenders making loans under HUD’s program after March 2 will be required to make certain financial assessments of a prospective borrower. Currently, loan qualifications primarily are a borrower’s age and the amount of equity in a home.

The financial protection bureau recommends three steps that homeowners with reverse mortgages should take to protect their heirs. The advisory, “Three Steps You Should Take If You Have a Reverse Mortgage,” is available at consumerfinance.gov/blog.

The steps involve verifying who is on the loan, and planning ahead for the non-borrowing spouse and for any family members living in the home.

The advisory also has links to a consumer guide for people considering a reverse mortgage and a question-and-answer tutorial.

Consumers can submit a complaint to the protection bureau at ConsumerFinance.gov, or by calling toll-free 1-855-411-2372.

Patricia Sabatini: psabatini@post-gazette.com or 412-263-3066.

[…]

Federal Home Loan Bank of Seattle Announces 2014 Unaudited Preliminary Financial Highlights

SEATTLE–(BUSINESS WIRE)–

Today, the Federal Home Loan Bank of Seattle (Seattle Bank) announced preliminary financial highlights for the year ended December 31, 2014, reporting $60.2 million of net income, compared to $61.4 million in 2013, and an increase in its retained earnings balance to $346.4 million as of December 31, 2014, from $287.1 million as of December 31, 2013.

Based on the bank’s fourth quarter 2014 financial results, the Seattle Bank’s Board of Directors declared a $0.025 per share cash dividend, to be paid on February 23, 2015. Dividends will be paid based on average Class A and Class B stock outstanding during fourth quarter 2014. In addition, the bank announced that it will repurchase up to $100 million of excess capital stock during first quarter 2015. The Seattle Bank repurchased $396.9 million of excess capital stock during the year ended December 31, 2014.

Based on its 2014 net income, the bank will contribute $6.9 million to its Affordable Housing Program (AHP) for awards in 2015.

“Our 2014 results build on our significant progress in returning the Seattle Bank to financial health. We are pleased to have strengthened our capital position, continued to repurchase and pay dividends on our stock, and as a result of our 2014 earnings, contributed nearly $7 million to our Affordable Housing Program,” said Seattle Bank President and CEO Michael L. Wilson. “Although we have grown our advances with certain segments of our membership, changes in our industry and membership continue to constrain our ability to prosper as a stand-alone Federal Home Loan Bank without relying on investments as a source of income. Our proposed merger with the Federal Home Loan Bank of Des Moines offers an opportunity to create a Federal Home Loan Bank cooperative with a more diverse membership and greater economies of scale—and well-positioned to meet member needs now and for years to come.”

Key features of the Seattle Bank’s operating results for the year ended December 31, 2014, included:

Higher net interest income. Net interest income after provision (benefit) for credit losses for the year ended December 31, 2014, increased to $146.3 million from $138.5 million for 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. In addition, 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 year ended December 31, 2014, as the remaining mortgage loans in the portfolio continued to pay down. Lower non-interest income (loss). Non-interest income decreased by $8.7 million for the year ended December 31, 2014, compared to the previous year. 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 early debt extinguishments during the year ended December 31, 2014, compared to the previous year. Higher other non-interest expense. The Seattle Bank’s other non-interest expense increased by $374,000 for the year ended December 31, 2014, compared to 2013, primarily due to an increase in operating expenses from $5.7 million of merger-related costs for the year ended December 31, 2014, partially offset by a decrease in other expenses, including the impact of a one-time $4.0 million write-off of software in 2013 without similar activity in 2014.

Other Financial Information

Total assets decreased to $35.1 billion as of December 31, 2014, from $35.9 billion as of December 31, 2013, primarily due to a decrease in advances and mortgage loans outstanding. Advances outstanding decreased to $10.3 billion as of December 31, 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 with various members during the remainder of 2014. Mandatorily redeemable capital stock decreased by $293.2 million as of December 31, 2014, compared to December 31, 2013, primarily due to the Seattle Bank’s quarterly repurchases of excess capital stock during 2014, partially offset by a redemption request resulting from a merger between two member banks. Accumulated other comprehensive income (loss) improved to a gain of $1.6 million as of December 31, 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 December 31, 2014, from $1.1 billion as of December 31, 2013. The Seattle Bank paid cash dividends (including interest on mandatorily redeemable capital stock) totaling $2.6 million during the year ended December 31, 2014. During the six months ended December 31, 2013, the Seattle Bank paid cash dividends of $1.4 million. No cash dividends were paid during the first half of 2013.

Unaudited Selected Financial Data ($ in thousands)

Selected Statements of Condition Data As of December 31, 2014 As of December 31, 2013 Advances $ 10,313,691 $ 10,935,294 Investments (1) 24,046,403 22,545,976 Mortgage loans held for portfolio, net 647,179 797,620 Total assets 35,129,197 35,870,314 Consolidated obligations 31,790,607 32,402,896 Mandatorily redeemable capital stock 1,454,473 1,747,690 Total capital stock 858,083 922,977 Retained earnings 346,375 287,090 Accumulated other comprehensive income (loss) 1,552 (71,768 ) Total capital (2) 1,206,010 1,138,299 For the Years Ended December 31, Selected Statements of Income Data 2014 2013 Net interest income $ 146,860 $ 137,334 Provision (benefit) for credit losses 584 (1,149 ) Net interest income after provision (benefit) for credit losses 146,276 138,483 Non-interest income (loss): Other-than-temporary impairment credit loss (4,840 ) (1,837 ) Derivatives and hedging activities 4,211 4,774 Other non-interest income (3) 1,707 6,867 Other non-interest expense 80,288 79,914 Total assessments 6,877 6,927 Net income $ 60,189 $ 61,446 Selected Performance Measures As of December 31, 2014 As of December 31, 2013 Regulatory capital (4) $ 2,658,931 $ 2,957,757 Risk-based capital surplus (5) $ 1,375,172 $ 1,483,070 Regulatory capital-to-assets ratio 7.57 % 8.25 % Leverage capital-to-assets ratio 11.24 % 12.21 % Market value of equity (MVE) to par value of capital stock (PVCS) ratio 114.29 % 107.67 % Return on PVCS vs. one-month London Interbank Offered Rate (LIBOR): Return on PVCS (6) 2.38 % 2.26 % Average annual one-month LIBOR 0.16 % 0.19 % Core mission activity (CMA) assets to consolidated obligations (7) 40.90 % 41.51 % (1) Consists of securities purchased under agreements to resell, federal funds sold, available-for-sale securities, and held-to-maturity securities. (2) Excludes mandatorily redeemable capital stock, which totaled $1.5 billion and $1.7 billion as of December 31, 2014 and 2013. (3) 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 income. (4) Includes total capital stock, retained earnings, and mandatorily redeemable capital stock. (5) 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. (6) Return on PVCS is computed as net income divided by average PVCS, for the year. (7) 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 2014 annual report on Form 10-K with the Securities and Exchange Commission (SEC) on or around March 16, 2015.

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 (the Merger Agreement). Further, by letter dated December 19, 2014, the banks received approval of their merger application submitted to the Federal Housing Finance Agency (FHFA). Following receipt of the FHFA’s approval, on January 12, 2015, the banks distributed the Joint Merger Disclosure Statement and voting materials to their members seeking ratification of the Merger Agreement by the members of both banks through a voting process that is expected to be completed by February 23, 2015. Material details of the Merger Agreement and the Joint Merger Disclosure Statement are included in the banks’ related Form 8-K filings with the SEC and should be reviewed in connection with consideration of the proposed merger. If a majority of the votes cast by members of each of the banks are cast for ratification of the Merger Agreement and all other conditions set out in the Merger Agreement are satisfied, the merger is expected to become effective on May 31, 2015.

The proposed merger between the Seattle Bank and the Des Moines Bank will not impact the Seattle Bank’s 2015 offering of AHP. In the event that the proposed merger is finalized during 2015, the Seattle Bank’s allocation of AHP funding and the program’s requirements will continue to be governed by the Seattle Bank’s 2015 AHP Implementation Plan.

Consent Arrangement

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 Board of Directors’ monitoring for compliance with the terms of such plans and policies, 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, and securing 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 four quarterly repurchases of up to $25 million of excess capital stock, with FHFA non-objection, during 2014, the Seattle Bank redeemed an additional $299.6 million of excess capital stock on which the redemption waiting periods had been satisfied and repurchased $2.3 million of excess Class B stock that had been purchased by members on or after October 27, 2010, for activity purposes. 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 year ended December 31, 2014, and on which the Seattle Bank’s external auditor has not completed its audit, and information regarding a proposed 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 year ended December 31, 2014, and other actions or transactions, including those relating to the ability of the Seattle Bank and the Des Moines Bank to obtain member approvals relating to the proposed merger, the completion of the proposed merger, the Amended Consent Arrangement, and payments of dividends and repurchases of capital stock, 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 and dividends and acceptance of final merger documentation), 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 SEC. The Seattle Bank does not undertake to update any forward-looking statements made in this announcement.

Members of the Seattle Bank have been provided the Joint Merger Disclosure Statement in connection with the merger. Members are urged to read the disclosures therein.

FinanceInvestment & Company Informationcapital stockinterest incomeSeattleFederal Home Loan Bank Contact:

Federal Home Loan Bank of Seattle

Connie Waks, 206-340-2305

cwaks@fhlbsea.com […]

Fitch Expects to Rate Nelnet Student Loan Trust 2015-1; Presale Issued

NEW YORK–(BUSINESS WIRE)–

Fitch Ratings expects to assign the following ratings to the Nelnet Student Loan Trust (NSLT) 2015-1 student loan asset-backed notes:

–$553,232,000 class A notes ‘AAAsf(EXP)’; Outlook Stable;

–$13,114,000 class B notes ‘A+sf(EXP)’; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) loans including 19.55% rehabilitated (rehab) loans. In Fitch’s opinion, the credit quality of the trust collateral is high, based on the guarantees provided by the transaction’s eligible guarantors and at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED). The U.S. is currently rated ‘AAA’, Outlook Stable.

Sufficient Credit Enhancement: Cash flow scenarios for class A and B notes were satisfactory under Fitch’s respective stresses. Total credit enhancement (CE) is provided by overcollateralization (OC) and excess spread, and for the class A notes, 2.32% subordination is provided by the class B notes. At closing, total and senior parity are expected to be 101.25% and 103.65%, respectively. A target OC amount equal to the greater of 1.25% of the adjusted pool balance and $2 million must be met before excess spread can be released from the trust.

Adequate Liquidity Support: Liquidity support is provided by an approximate $6.51 million reserve account (1.15% of outstanding note balance), funded at closing with note proceeds. On or after the February 2020 distribution date, the specified reserve requirement will be the greater of 0.25% of the outstanding note balance and 0.10% of the initial note balance.

Acceptable Servicing Capabilities: Nelnet, Inc. will service 100% of the NSLT 2015-1 portfolio. In Fitch’s opinion, Nelnet, Inc. is acceptable servicer of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, ‘AAAsf’ FFELP ABS ratings will likely move in tandem with the ‘AAA’ U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch’s published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades. For further discussion of Fitch’s sensitivity analysis, please see the presale titled ‘NSLT 2015-1’, dated Feb. 17, 2015, available at www.fitchratings.com.

Additional information is available at ‘www.fitchratings.com‘.

Applicable Criteria and Related Research:

–‘Global Structured Finance Rating Criteria’ (May 20, 2014);

–‘Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria’ (June 23, 2014);

–‘Representations, Warranties and Enforcement Mechanism in Global Structure Finance Transactions’ (Oct. 31, 2014).

Applicable Criteria and Related Research: Nelnet Student Loan Trust 2015-1 (US Student Loans)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862220

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=979935

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Security Upgrades & DowngradesFinanceFitch RatingsStudent Loan Contact:

Fitch Ratings

Primary Analyst

Charlene M. Davis

Director

+1-212-908-0213

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Victoria Ohorodnyk

Associate Director

+1-212-908-0866

or

Committee Chairperson

Tracy Wan

Senior Director

+1-212-908-9171

or

Media Relation:

Elizabeth Fogerty, +1-212-908-0526

elizabeth.fogerty@fitchratings.com […]

Dangers of applying for an online payday loan

As consumers move their financial activities online, applying online for a payday loan may seem like the natural thing for a cash-strapped person to do.

But you could be setting yourself up for a world of hurt, from paying exorbitant interest rates to having funds swiped from your bank account to being threatened by debt collectors. Just filling out an application could be enough to begin the harassment and thievery.

“Absolutely the worst thing you can do is apply for an online payday loan,” says Jay Speer, executive director of the Virginia Poverty Law Center.

Most online payday loan sites aren’t even operated by lenders. They’re run by “lead generators,” who seek your personal information, such as Social Security number, driver’s license number and bank account details. They then sell that information to lenders.

“Your email and telephone explode after that,” Speer says, as lenders vie to offer you cash. That can happen even if you live in one of the 15 states where payday loans are illegal.

Lenders aren’t the only ones in the market for your personal information. “There’s a good chance they sell to fraudsters — people who come after you months or years later,” he says.

Sandra Green (not her real name) has experienced this firsthand. The Virginia woman turned to online payday loans after her husband was injured and couldn’t work for two years. Their credit was damaged and they couldn’t get cash to pay their bills from traditional financial institutions.

Green took out several loans totaling $3,000 to $4,000 starting around 2010. The lenders that she received cash from took their payments from her bank account — but they weren’t the only ones. A company she had never heard of swiped money from her account, creating an overdraft.

She filled out a request for the bank to stop payment. That worked for about six months, and then the withdrawals started again. “People will change the identity of the company and then they’ll hit it (the account) again. Once they do this it’s a never-ending cycle,” she says.

Companies she’d never done business with would call her at work and at home, harassing her. One threatened to file papers with the local sheriff’s office if she didn’t pay immediately.

“They get really belligerent when you don’t do what they want you to do,” Green recalls.

She feared she’d wind up in bankruptcy because of the loans and finally sought help from Blue Ridge Legal Services, a Virginia legal aid society, in 2013. Blue Ridge connected her with the Virginia Poverty Law Center.

Speer says of online payday lenders: “These people are like sharks. If you give them some money it’s like throwing blood in the water.”

Payday loans are generally described as small, short-term loans. A consumer writes a check for the amount borrowed, plus a fee. The lender advances money against the check and the check is held until the next payday, when the loan and fees must be paid. Or, in the practice used by most online lenders, a consumer can grant the lender access to his bank account, and the lender electronically accesses the account to deposit money and withdraw payment.

Even paying back legitimate loans carries astronomical costs. Green took out a loan of $350. It took six weeks for her to pay it back, and she paid nearly $300 in fees.

Online payday loans boom
Her experiences are not uncommon. “Fraud and Abuse Online: Harmful Practices in Internet Payday Lending,” a 2014 study by the Pew Charitable Trusts, found online installment payday loans typically have an APR of 300 percent to more than 700 percent. Online lump-sum payday loans have a typical APR of 650 percent, or $25 per $100 borrowed per pay period. Exorbitant fees are also charged, and initial payments might not be applied to the loan’s principal.

Online payday lending is big business. Revenue tripled from $1.4 billion in 2006 to $4.1 billion, according to Pew.

Of the more than 250 online payday borrowers surveyed by Pew, almost 40 percent said their personal information was sold to a third party without their knowledge. Nearly one-third had an unauthorized withdrawal from their account.

Threats were common, with 30 percent of those surveyed saying they were threatened by an online lender or debt collector.

“Harassment and fraud are really concentrated in the online lending market,” says Nick Bourke, project director for Pew’s study on payday loans.

Part of the problem stems from the fact that there’s no control over who can get your information once you apply for an online payday loan. “People’s personal information can be spread far and wide,” Bourke says.

Even if the loans are fraudulent, a consumer’s failure to pay them may be reported to one of the three main credit bureaus, Speer says, which can impact a consumer’s ability to rent an apartment or land a job.

Many storefront payday lenders are fed up with the behavior of these online payday lenders.

“These unlawful lenders roam the Internet trolling for customers. They are scammers. They are fraudsters,” says Amy Cantu, spokeswoman for the Community Financial Services Association of America, which represents more than half of the country’s storefront payday lenders.

Though online payday lenders represent just one-third of the marketplace, 90 percent of payday lending complaints filed with the Better Business Bureau are aimed at them, according to Pew.

Self-regulation efforts
Association members vow to adhere to the organization’s best practices, which include complying with state and federal laws, being licensed in each state in which they do business and adhering to acceptable debt collection practices.

Some of the association’s larger members also have an online presence, she says, but those sites also adhere to the organization’s best practices.

Cantu says she understands that consumers with financial troubles may prefer the anonymity of the Internet when seeking cash, rather than walking into a storefront payday lender. But online lenders are supposed to only operate in the states that allow payday lending.

Her organization wants the federal consumer watchdog agency, the Consumer Financial Protection Bureau, to crack down on illegal lenders.

Agencies crack down
Already the CFPB and the Federal Trade Commission are stepping up action against fraudsters. In a joint news conference in September, the agencies announced they’d filed suit against two online payday lenders.

The CFPB sued Kansas City-based Hydra Group, while the FTC sued CWB Services, also based in Kansas City.

The CFPB received more than 1,300 consumer complaints about the Hydra Group.

At the news conference, CFBP Director Richard Cordray accused the Hydra Group of “running an illegal cash-grab scam to force purported loans on people without their prior consent. It is an incredibly brazen and deceptive scheme.”

Both the Hydra Group and CWB Services were accused of buying personal information, including bank account numbers, from lead generators. The companies would deposit money into consumers’ bank accounts without any signed agreements, and then make unauthorized withdrawals from the accounts. If a consumer complained, the companies would produce false loan documents.

In 15 months, the Hydra Group made $97.3 million in loans and collected $115.4 million from consumers.

Even if consumers closed their accounts, their information might have been sold to debt collectors, who then attempted to collect more money.

A federal judge temporarily shut down the Hydra Group, freezing its assets. The CFPB is requesting a permanent shutdown, along with penalties imposed upon the company and refunds made to consumers.

With CWB Services, the federal court froze the company’s assets and appointed a receivership and the FTC is requesting consumers’ money be refunded. The company had raked in $46 million in 11 months, said Jessica Rich, the FTC’s director of the Bureau of Consumer Protection.

Bourke says the CFPB should ensure that small loans are tailored to the borrower’s ability to pay them off and should provide more protection to consumers, particularly against illegal debt collection practices.

“The core of the problem is that payday loans don’t help people. They drive people further into debt and distress,” he says.

See related:Know your credit card fraudster

,

Know your rights under the Truth in Lending Act

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New protections from financial ‘gotchas’ in 2015Dangers of applying for an online payday loanCFPB orders refunds for 98,000 subprime cardholdersFighting back against the growing threat of tax fraudFinanceLoanspayday loanbank account […]