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“Even,” An Interest-Free, Mobile Alternative To Payday Loans

Image even-app-hand.png

A startup whose first product is a mobile money management application called Even, designed to offer low-income workers interest-free credit to help them make ends meet in between paychecks, has raised $1.5 million in a seed round led by Keith Rabois of Khosla Ventures, with participation from other investors. The service is meant to offer hourly, and generally part-time workers an alternative to riskier payday loans and other lending products where debt compounds, making it even more difficult to recover from life’s curveballs.

Other investors in the round included Homebrew, Kevin Systrom, Mike Krieger, Michelle Wilson (former general counsel of Amazon), David Tisch, Adam Rothenberg, Sam Lessin, Slow Ventures, Red Swan, Andrew Fine, Zach Brock, Joe Ziemer, Andrew Kortina (Venmo).

One of the worst injustices about the income inequality situation in the U.S. is just how expensive it is to be poor. Setbacks that others would consider inconveniences can actually ruin your life, explains author Linda Tirado, in her book “Hand to Mouth: Living in Bootstrap America,” which details what it’s like to live in poverty as low-wage worker. In one story, she explains how a minor annoyance to most of us – getting her car towed – ultimately cost her both of her jobs, and soon after, her apartment.

Unfortunately, much of the consumer-facing technology emerging from Silicon Valley is focused on serving the needs of the better-off, where just about anything can now be ordered on demand from groceries to black cars to even manservants or just cookies. There’s definitely growth potential in portions of this market, as Uber-watchers could tell you, but the companies that emerge don’t always meet the needs of the many.

According to the U.S. Census Bureau, 45.3 million live in poverty in the U.S. in 2013. Nearly half of Americans in major cities live in a state of financial insecurity, and many turn to alternative – and often predatory – lending services when times are tough.

Even also reports that there are now 51 million in America who spend an average of $1,000 per year on things you “pretty much get for free at a bank.”

The company’s big idea? To offer consumers interest-free credit that helps them during bad weeks. The way the product works is not at all like payday lenders, though they’re targeting the same market. Customers using Even will authorize the company to manage their money for them. During good weeks, it sets a little money aside on your behalf, then, during the not-so-good weeks, users can tap into credit to pay their bills, or deal with whatever other expenses come up.

The program, available to consumers via a mobile app, is still in pilot testing, meaning a lot of the finer details are still being worked out. However, the end result is that customers receive a steady paycheck of the same amount from week to week, even as they work more hours some weeks, and fewer on other weeks.

The service works with a customer’s own bank account, and offers a number of features including automatic budgeting, help for emergency expenses, and even a “pause” button for when you need to turn off the $5/week charge while you recover from a hardship, like a job loss.

Instead of making it more difficult to pay back the debt, the idea is to be lenient – taking as little as a $1 per week, if need be, while maintaining the customer relationship during the bad times.

“It’s kind of like insurance,” says co-founder Jon Schlossberg. “You pay a flat monthly fee for coverage.”

It’s still expensive to be poor: Even would cost $260/year, but it’s less expensive than getting into trouble with payday lenders. It could also mean that bills and rent get paid on time, which could potentially break the cycle where a single bad break, or a week with reduced hours, can snowball into homelessness.

Citing a U.S. government research study, Schlossberg says he was blown away by learning that 77% of Americans reported they would rather have more consistent income than make more money. A self-admitted “privileged white male,” he realizes that having everything come easy is not the case for most, he says.

“Just wanting money to be there every week is one hardship I’ve never experienced…that’s something that’s kind of hidden from Silicon Valley”

“Just wanting money to be there every week is one hardship I’ve never experienced…that’s something that’s kind of hidden from Silicon Valley,” says Schlossberg. “The problem is income volatility.” What’s increasingly happening, he explains, is that as the workforce shifts towards more flexible labor, part-time workers end up with inconsistent hours. This issue was recently detailed in a New York Times profile of Starbucks barista Jannette Navarro, whose ever-fluctuating hours at the popular coffee chain were due to Starbucks’ reliance on employee scheduling software, designed to boost profits, not make workers’ lives easier.

In addition to its $5 per week consumer-facing service, Even is also selling to enterprise, and has at least one deal in discussions with a large business that you “visit weekly.” (Starbucks?,” I guessed. “No comment.”) With corporate customers, Even could be offered a company benefit – potentially even boosting the bottom line due to the high costs associated with part-time turnover, associated with the shift scheduling issues. (U.S. businesses see 69% turnover for part-timers vs. 23% for full-time workers, excluding seasonal labor, Even reports.).

The company is based in Oakland in order to strategically place itself closer to potential customers. In addition to product designer Schlossberg, previously of Bonobos, its founding team includes designer and engineer, Ryan Gomba previously of Instagram, who worked on the iOS app; Cem Kent, previously of Taykey; and Quinten Farmer, who earlier tried to tackle the student loan problem via The Open Loans Project.

Schlossberg acknowledges that they don’t know if the business model of charging $5/week will work, because there are a still a lot of unknowns the pilot is attempting to figure out like the average credit utilization or how much they’ll lose on defaulted credit. But he does say that the big businesses they’ve talked to so far are “extremely receptive to this product.”

“If we’re right, it’s a win for their company, it’s a win for the employees because their lives are meaningfully improved, and it’s a win for us because it gives us distribution into a market that’s vastly underserved,” says Schlossberg.

Even expects to launch publicly this year, though users can request an invite now.

[…]

Some Respected Firms Are Backing America's Shadiest Payday …

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It would be illegal to open a shady lending company charging poor people 700% interest on loans—unless you lived on certain Indian reservations. In that case, respectable investors would be knocking down your door.

The payday loan industry is perhaps the most execrable example of financial services serving as bloodsuckers of the poor. Today, many payday loans can be found online—easily accessed by anyone, but only subject to the laws where they are physically based. A neat trick for avoiding regulation. In Bloomberg today, Zeke Faux has a story about the proliferation of lending operations based on Indian reservations, which are sovereign and therefore able to get around the usury laws that would normally prevent you from charging someone “$30 every two weeks per $100 borrowed, equivalent to about 700 percent a year.”

There is no excuse for these businesses. They are immoral and exploitative. But at least if they were being run by impoverished American Indian tribes that were using the profits to mitigate the terrible needs on their reservations, there would be a sort of excuse. In fact, though, Faux profiles companies based on Indian land that give the tribe only tiny percentage of profits. The big money goes to—and this is the most sickening part—a variety of extremely “respectable” Wall Street firms and venture capitalists, who invest in these awful, bloodsucking businesses. (Some of the money invested in these things originates in pension funds, meaning regular working people, city employees, are indirectly subsidizing businesses that directly prey on other working people.) One of the investors mentioned is Sequoia Capital, one of the most prominent venture capital firms in Silicon Valley.

Sequoia Capital, a venture-capital firm that backs Think Finance, declined to comment. Jennifer Burner, a spokeswoman for Think Finance, said the companies cited in the complaint are legal, licensed and follow tribal law.

“We’re proud to be a service provider to Native American e-commerce lending businesses,” she said in an e-mail.

“Tribal law,” in this case, means “we are so desperate for money that we will legally sanction any fucking outrageous form of usury.”

Anyhow, entrepreneurs are the heroes of America.

[Photo: Flickr]

[…]

Payday Loan Startup That Promised to "Kill" Finance Now Total …

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In 2009, Sarah Lacy, then a writer for TechCrunch, set the gold standard for startup hype in a write-up about Wonga, a payday loan company that just might “upend the world’s financial institutions.” Today, Wonga is about as hated as Wall Street and was just forced to write down £220m of debts for 330,000 customers because the loans were unethical.

Even God is mad at Wonga.

The company is based in London, but the list of venture capitalists who invested $145.4 million over the years includes Silicon Valley stalwarts like Accel Partners and Greylock. Wonga’s other investors are prominent in Europe. Local reports of its implosion have been relatively mild, but Wonga’s misdeeds are pretty spectacular.

In May, Wonga’s CEO stepped down after a scant six months on the job. In July, Andy Haste as chairman, hoping his “blue chip financial credentials” might be able to make people forget that the company sent out fake legal letters to scare borrowers who had trouble paying back their loans:

The UK’s biggest payday lender has been without a permanent chief executive or chairman since its co-founder Errol Damelin quit as chairman in June last month. Damelin’s departure, seven months after he stood down as chief executive, came just before the financial regulator ordered the payday lender to pay £2.6m in compensation for misleading customers by issuing letters to struggling borrowers under the name of fake legal firms.

The Financial Conduct Authority said Wonga had been guilty of “unfair and misleading debt collection practices” after it emerged the lender had made up the companies to threaten legal action against customers.

The Law Society has called for a criminal investigation but Haste said Wonga had not been contacted by police. “As of today we are not under criminal investigation and our whole focus is working with our regulator to pay compensation to customers in a timely manner.”


Wonga attracts high interest from City of London policeWonga attracts high interest from City of London policeWonga attracts high interest from City of London p

The lender says the issue is ‘historic’ but the Law Society has asked the police to…Read moreRead on

The write-down as well as new “affordability checks” were part of a “voluntary agreement” with the UK’s Financial Conduct Authority about Wonga’s lending practices, reports the BBC.

The company, which has faced criticism for its high interest rates and debt collection tactics, made the changes after discussions with regulators.

Customers in arrears whose loans would not have been made under the new checks will have their debts written off.

A further 45,000 customers in arrears will not have to pay interest on loans.

The BBC said Wonga lends money to roughly a million customers a year. In July, Haste promised to enforce stricter criteria. The process sounds corrupt from start to fake letter finish. Take this example from a 20-year-old customer named Elliott Gomme who easily gamed the system to get £120 to go on vacation by claiming that he worked full-time:

“My bank couldn’t give me an overdraft or anything, and so I went to [Wonga],” he says.

He received his money and went on holiday, but a few weeks later he says the firm started calling him and he says they were “constant”.

“They were ringing me every day,” he says. “They were telling me how much I owe and that there was added interest.”

Elliot says that a few months later he was being told his debt had risen to more then £800 and it began to affect his day-to-day life.

Reporters are no better than investors at picking which startups will succeed. We’ve all made wrong calls. But what’s so strange about TechCrunch’s post from 2009 is that Wonga was already controversial, a fact Lacy noted and dismissed:


Wonga: How the Net Should Kill the Finance Industry | TechCrunchWonga: How the Net Should Kill the Finance Industry | TechCrunchWonga: How the Net Should Kill the Finance Industr

What’s awesome about the Internet is how it breaks up monopolistic markets where middlemen unfairly …Read moreRead on

Critics have said that Wonga is usurious by charging a 1% interest fee per day. But that’s a knee-jerk response. […]

Sure, you can say Wonga is dangerous because it’s giving people an easier way to live outside their means. But that’s a bit like arguing giving kids condoms encourages teenage sex. You can’t change human behavior, but you can help make people safer.

Now here’s the downside on Wonga: It’s only available in the UK . . .

Tech bloggers must be humans because you can’t change their behavior either.

To contact the author of this post, please email nitasha@gawker.com.

[Image via Associated Press]

[…]

Furiex Pharmaceuticals Enters into a Loan Agreement for $15 Million and Restructures Its Existing Secured Loan

MORRISVILLE, N.C.–(BUSINESS WIRE)–

Furiex Pharmaceuticals, Inc. (FURX) announced today it has executed a $15 million debt financing transaction with Fred Eshelman, Pharm.D., chairman and a 27.5% shareholder of Furiex. In parallel, Furiex has also entered into a Second Amended and Restated Loan and Security Agreement with MidCap Financial, LLC and Silicon Valley Bank to restructure its existing $40 million credit facility (MidCap/SVB Loan). The restructured agreement defers payment of principal until May 15, 2014 with a flexible amortization schedule linked to Furiex’s receipt of alogliptin royalties.

Under the terms of Dr. Eshelman’s loan agreement, his debt will be subordinated to the MidCap/SVB loan and will accrue interest at a rate of 9% per annum until maturity. The loan has an interest-only period of 12 months and thereafter will amortize principal payments of $166,700 per month plus accrued interest until the final balloon payment to be made at maturity, which will occur 91 days following repayment of the indebtedness under the MidCap loan agreement subject, however, to an outside maturity date of January 1, 2019.

The MidCap/SVB loan accrues interest at a rate of 10% per annum with interest only to be paid monthly until May 15, 2014 at which time quarterly principal payments become due. The principal payments are set as a percentage of the alogliptin royalties received by Furiex, subject to minimum and maximum amounts. The outside maturity date for repayment of the loan is October 1, 2018.

Proceeds from both debt facilities will be used to fund Furiex’s eluxadoline program for diarrhea-predominant irritable bowel syndrome, or IBS-d, that is currently in Phase III development, and for general working capital purposes.

“The loan commitment from Dr. Eshelman and the revised agreement with our lender provides us the financial resources needed to fund our eluxadoline program,” said Marshall Woodworth, chief financial officer, treasurer and assistant secretary of Furiex. “Based on our current forecast of expected receipt of various milestone and royalty payments, we expect to have sufficient cash to fund the business through to the top-line data readout of the Phase III studies.”

“The team is energized with the vote of confidence from our chairman and largest shareholder,” added June Almenoff, M.D., Ph.D., president and chief medical officer, “Financing is out of the way, and we look forward to completing our pivotal studies on eluxadoline, a key value driver for our company.”

About Eluxadoline

Eluxadoline is a first-in-class, locally-acting mu opioid receptor agonist and delta opioid receptor antagonist in Phase III development for treatment of IBS-d. In vivo studies indicate that the activity of eluxadoline at the two different opioid receptors works to modulate GI motility and decrease intestinal pain, without the constipating effects of unopposed mu agonist activity. Furiex successfully completed a Phase II study in 807 patients with IBS-d, results of which are published in Gastroenterology 2013; 145:329-338. Eluxadoline is locally active in the gut with very limited systemic bioavailability, thus potentially decreasing central nervous system effects and other systemic side effects associated with therapies currently used to manage IBS-d.

About IBS-d

Diarrhea-predominant irritable bowel syndrome is a functional bowel disorder characterized by chronic abdominal pain and frequent diarrhea, which affects approximately 12 million Americans. Although the exact cause of IBS-d is not known, symptoms are thought to result from a disturbance in the way the gut and nervous system interact. IBS-d can be extremely debilitating and there are limited therapeutic options for managing the chronic symptoms. IBS-d is associated with economic burden in direct medical costs and indirect social costs such as absenteeism and lost productivity, along with decreased quality of life.

About Furiex Pharmaceuticals

Furiex Pharmaceuticals is a drug development collaboration company that uses innovative clinical development design to accelerate and increase value of drug development programs by advancing them through the drug discovery and development process in a cost-efficient manner. Our drug development programs are designed and driven by a core team with extensive drug development experience. The company collaborates with pharmaceutical and biotechnology companies and has a diversified product portfolio and pipeline with multiple therapeutic candidates, including one Phase III-ready asset, two compounds in Phase III development, one of which is with a partner, and four products on the market. The company’s mission is to develop innovative medicines faster and at a lower cost, thereby improving profitability and accelerating time to market while providing life-improving therapies for patients. For more information, visit www.furiex.com.

About MidCap Financial LLC

MidCap Financial is a commercial finance company focused on middle market lending in healthcare and other specialty vertical markets. MidCap specializes in middle market loans in the $10 million to $200 million range. Its principal officers are all veterans of the healthcare finance industry, having worked together at three healthcare finance companies previously. The company is headquartered in Bethesda, MD, with offices in Chicago and Los Angeles. www.midcapfinancial.com.

About Silicon Valley Bank

Silicon Valley Bank (www.svb.com) is the premier bank for technology, life science, cleantech, venture capital, private equity and premium wine businesses. SVB provides industry knowledge and connections, financing, treasury management, corporate investment and international banking services to its clients worldwide through 27 U.S. offices and six international operations.

Silicon Valley Bank is the California bank subsidiary and the commercial banking operation of SVB Financial Group. Banking services are provided by Silicon Valley Bank, a member of the FDIC and the Federal Reserve System. SVB Financial Group is also a member of the Federal Reserve System.

Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although Furiex attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors which could cause actual results to differ materially include the following: continuing losses and our potential need for additional financing; the risk that eluxadoline will fail in Phase III clinical trials; our reliance on our collaborators and the risk that revenues from royalties and milestone payments differ from expectations; our need to find a collaborator for our late-stage compounds or incur the expense and risk of commercializing them ourselves; changes in the safety and efficacy profile of our existing compounds as they progress through research and development; potential changes to regulatory guidance by regulatory agencies such as the U.S. Food and Drug Administration and the European Medicines Agency; the terms of new collaborative agreements that we might enter into in the future; the costs of defending any patent opposition or litigation necessary to protect our proprietary technologies; and the other risk factors set forth from time to time in the SEC filings for Furiex, copies of which can be found on our website.

Contact:

Furiex Pharmaceuticals, Inc.

Media/Analysts/Investors:

Sailash Patel, 919-456-7814

sailash.patel@furiex.com […]

Cash Out Refinance Mortgage Loan Service On BlueLoanServices.com Receives Glowing Reviews From Clients

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Cash Out Refinance Mortgage Loan Service On BlueLoanServices.com Receives Glowing Reviews From Clients

Recently posted client reviews show how Blue Loan Services’ cash out refinance loan option helps homeowners from all over California realize the benefits of refinancing their mortgages.

Blue Loan Services

San Diego, CA (PRWEB) August 13, 2013

Blue Loan Services, a California based full service mortgage company headed by father and son team Robert and Brandon Blue, has been serving their clients with the lowest possible home finance and refinance rates for many years and offers a wide range of loan products that can help borrowers find loans that will perfectly suit their unique financial situations and lifestyles. The team of mortgage professionals at the company has a reputation for providing fast, on time service and attending to their clients with the greatest level of personal care and professionalism. One of the services that the company has become known for is the cash out refinance mortgage loan option provided. The quick closing times achieved by the Blue Loan Services team as well as their ability to work with clients and loan servicers to navigate tricky loan applications have helped homeowners all over California to realize the benefits of refinancing their mortgages. New client reviews from those who have recently closed refinance loans with the company attest to this customer satisfaction.

As the Blue Loan Services website states: “A home refinance loan can not only improve your current rate and terms, but can give you a chance to change the type of loan you are in, increasing your loan payoff time. Refinancing your home loan enables you to replace your existing home loan with a new home loan with better terms while giving you the opportunity to get cash back from the equity you have built in your home. Using the equity in your home is a powerful tool that can help you improve your overall financial well being and pay off high interest loans, debts, and credit cards.” They also post some of the benefits of refinancing being:

“Lower your rate Decrease payoff time Get cash out Consolidate debt Pay off credit cards College tuition Home improvement Medical expenses”

Blue Loan Services has helped many California homeowners to realize these benefits. One of the new Blue Loan Services reviews from a client living in Redwood City, CA, states:

“Everyone I dealt with at Brandon Blue was extremely professional, responsive and courteous. I was refinancing my primary loan, but had a 2nd, so a subordination was needed from that 2nd mortgage company. There was some doubt early on whether that subordination would happen in time, but Shari at Brandon Blue was calling my 2nd mortgage company on a nearly daily basis to push them to get it done! She was key to my refinance completing on time. The process Brandon Blue has in place for communicating with their customers is very robust. I’ve probably refinanced 10 times in my life, and I’ve never had anywhere near this level of communication and willingness to help from any other company. I would highly recommend Brandon Blue for anyone with mortgage needs!”

Another client from Carmel Valley says: “From the very start of my loan process Brandon Blue was very professional and personable. He answered my phone calls and e-mails either immediately or as soon as my information was available. The entire process was seamless and efficient including the appraisal and all other individuals involved. I was able to re-fi my home mortgage and reduce my rate from 5.375% to 3.75% – A $703 a month interest savings and $200K savings over 10 years! The entire process from date of “lock” to loan funding took less than 30 days. If you want your loan to be completed professionally and in a timely manner I highly recommend Brandon Blue of Blue Home Loans and his Team!”

These are just a few of the many reviews highlighting the great refinancing services offered by Brandon Blue’s team at Blue Loan Services. For more information on this and the other services offered by the company please visit BlueLoanServices.com or call call 1-888-929-BLUE (2583) to speak with an experienced mortgage professional.

CA Dept of Real Estate — Licensed Broker #01094374 NMLS #938365


[…]

Cash Out Refinance California: Blue Loan Services Receives Commendation For Excellent Refinancing Services

SAN DIEGO, Aug. 8, 2013 /PRNewswire-iReach/ — Blue Loan Services is a full service mortgage company that has been helping residents of California to find the best loan products and home loan rates for many years. The company, headed by the father and son team Robert and Brandon Blue, has been dedicated to serve its customers with honesty, integrity and competence. The Blue Loan Services team of mortgage professionals operates with the goal to provide home loans to its clients while providing them with the lowest interest rates and closing costs possible. One of the abilities that the mortgage company is particularly known for is providing the best rates for a cash out refinance California has to offer. Dozens of reviews of the company attest to both the low rates locked in through the company’s services and the fast and on time loan processing made possible through the online loan application and documentation portal found on the company’s website.

(Photo: http://photos.prnewswire.com/prnh/20130808/MN59342)

One review from a client who recently completed a refinance loan with Blue Loan Services says: “Everyone I dealt with at Brandon Blue was extremely professional, responsive and courteous. I was refinancing my primary loan, but had a 2nd, so a subordination was needed from that 2nd mortgage company. There was some doubt early on whether that subordination would happen in time, but Shari at Brandon Blue was calling my 2nd mortgage company on a nearly daily basis to push them to get it done! She was key to my refinance completing on time. The process Brandon Blue has in place for communicating with their customers is very robust. I’ve probably refinanced 10 times in my life, and I’ve never had anywhere near this level of communication and willingness to help from any other company. I would highly recommend Brandon Blue for anyone with mortgage needs!”

Another of the Blue Loan Services reviews from a Carmel Valley, CA, resident says: “From the very start of my loan process Brandon Blue was very professional and personable. He answered my phone calls and e-mails either immediately or as soon as my information was available. The entire process was seamless and efficient including the appraisal and all other individuals involved. I was able to re-fi my home mortgage and reduce my rate from 5.375% to 3.75% – A $703 a month interest savings and $200K savings over 10 years! The entire process from date of “lock” to loan funding took less than 30 days. If you want your loan to be completed professionally and in a timely manner I highly recommend Brandon Blue of Blue Home Loans and his Team!”

An Aspen Davis resident and client of Blue Loan Services states: “I’ve refinanced using online mortgage lenders many times and had no problems with Brandon and his team. They were very responsive to my questions and got things done quickly. His rates and costs were the best I was able to find on the internet, and, of course, were well below what the banks and credit unions could offer. Brandon also told us that he would continue to monitor our loan as the market changes and if they find that we could benefit from refinancing again, they would let us know–great service!”

These are just a few of the many shining reviews the Blue Loan Services team has received regarding their services. Those who are interested in availing of these services may visit the company’s website by clicking here or call 1-888-929-BLUE (2583) to discuss their loan options with an experienced mortgage professional.

CA Dept of Real Estate — Licensed Broker #01094374 NMLS #938365

Media Contact: Brandon Blue, Blue Loan Services, 1-888-929-BLUE (2583), blueloaninfo@gmail.com

News distributed by PR Newswire iReach: https://ireach.prnewswire.com

[…]

All-cash buyers cut swath through Napa housing market

The number of Napa homes purchased with all cash reached almost 40 percent in 2012, the result of high investor interest, a difficult mortgage environment and perceived higher returns on investment, a real estate information service reported.

In 2011, 354 Napa County properties were bought with all cash. In 2012 that number reached 490, San Diego-based DataQuick reported earlier this year. That’s a 38.4 percent increase.

Halfway through 2013, those involved with the local real estate industry report that all-cash offers are still common but aren’t always required to make a successful offer.

Many buyers think “cash is king,” but according to Randy Gularte of Heritage Sotheby’s International Realty, that’s not always the case. He’s seen a slight decrease in all-cash buyers over the past six months, from an estimated 35 percent to about 25 percent.

When dealing with homes priced at around $800,000 and below, “I’m seeing less cash buyers,” Gularte said.

“We’ve swung back to a seller’s market,” explained Gularte. Instead of being forced to sell to get out from under a bad loan or avoid foreclosure, today’s sellers are saying “I want the best price,” Gularte said. With home values on the rise, “they are willing to wait to get the extra money” — all cash or not, he said.

“They aren’t desperate” like during the foreclosure crisis. “Sellers can say, ‘I don’t need to jump at the first deal,’” said Gularte.

“We still have a strong presence of all-cash buyers in the market,” said Giselle Lampe, Realtor associate with Coldwell Banker Brokers of the Valley. About 30 to 40 percent of her buyers are looking to buy with all cash.

However, a seller that is presented with multiple offers can cherry-pick from the offers and what best meets his or her particular needs, whether that is a quick close or perhaps fewer or no contingencies, Lampe said.

“Yes, the seller wants to go with highest offer but also strongest offer and cleanest offer,” she said. That may not always be the all-cash buyer.

The Realtor said the all-cash buyer typically gets the money from a variety of sources, including parents, investments and savings. “Sometimes parents buy the property and transfer title” to the son or daughter, she said.

Lampe noted that even all-cash buyers will sometimes decide to take on some financing after their all-cash offer has been accepted. In that case, the original purchase contract must then be changed and an appraisal required. “It can be done if the seller allows it,” she said.

Rich Blanton, a financial adviser at Wells Fargo Advisors in Napa, said that his advice for a buyer considering paying all cash for a home depends on individual circumstances.

“Borrowing money from family or friends can sometimes change the relationships with those people,” Blanton said. There are also tax and other financial implications when it comes to taking money out of a tax-qualified account like a 401(k) or for those gifting money to the buyer.

Considering today’s low interest rates, Blanton said one question he would ask his clients considering paying all cash for a home is, “Why would you want to have that cash locked away and not be able to take that money and do other things with it?”

Blanton said he would recommend making enough of a down payment, usually 20 percent, to avoid having to pay mortgage insurance premiums against the loan.

Chris Salese, a mortgage banker with Del Sur Mortgage, said some all-cash buyers close on the home and immediately turn around and taken a loan out on the property. There used to be restrictions on how soon you could do a so-called “cash out refinance” on a property purchased with all cash, Salese noted, but those rules changed in 2011.

With home values accelerating again, “people are digging deep to become a homeowner and if it requires that they present themselves as an all-cash buyer, home buyers are doing everything they can to do that,” Salese said.

“It’s clear that a lot of today’s housing market recovery is being fueled by people putting their own money into homes. Some cash buying is part of a normal housing market, but we’re at twice that normal rate,” said John Walsh, DataQuick president.

“There are always some rich people, also buyers from abroad, but in a normal market the biggest single category would be retirees and empty-nesters who are downsizing. Today, a lot of buyers are chasing what they view as the deal of a lifetime,” Walsh said.

Cash purchases accounted for a record 32.4 percent of California’s overall home sales last year, up from 30.4 percent in 2011 and more than double the annual average of 15.6 percent since 1991, when DataQuick’s cash statistics begin.

[…]

PAYDAY LENDING: Roth, Hueso swing votes in Wednesday … – blog


PAYDAY LENDING: Roth, Hueso swing votes in Wednesday hearing

Posted on | April 17, 2013 | Comments

A pair of senators representing parts of Riverside County could be swing votes on legislation intended to restrict the use of high-interest payday loans.

Supporters of the measure, SB 515, have lobbied state senators Richard Roth, D-Riverside, and Ben Hueso, D-San Diego, leading up to Wednesday’s hearing of the Senate Banking and Financial Institutions Committee. Hueso’s district includes part of the Coachella Valley.

Deferred-deposit loans typically involve a customer writing a postdated check that includes the fee and principal. They receive cash in return.

The legislation would limit the number of payday loans to any one borrower in a year. It also would require lenders to review borrowers’ ability to pay off their loans and to let borrowers pay off the loans with an installment plan, among other provisions.

Supporters of the bill, including the Oakland-based Center for Responsible Lending, say the measure would make the loans safer for consumers and help prevent a “payday debt trap” of repeated loans.

Opponents of the bill, including the Greater Riverside Hispanic Chamber of Commerce, say the rules would would ruin the industry and take away a source of credit used by millions of customers. It would drive people who need money to unregulated online sites, critics claim.

By: Jim Miller

Category:Cal Senate

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Jim Miller

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Political Empire Blog: PE Politics Team
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PAYDAY LENDING: Roth, Hueso swings vote in Wednesday … – blog

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PAYDAY LENDING: Roth, Hueso swings vote in Wednesday hearing

Posted on | April 17, 2013 | Comments

A pair of senators representing parts of Riverside County could be swing votes on legislation intended to restrict the use of high-interest payday loans.

Supporters of the measure, SB 515, have lobbied state senators Richard Roth, D-Riverside, and Ben Hueso, D-San Diego, leading up to Wednesday’s hearing of the Senate Banking and Financial Institutions Committee. Hueso’s district includes part of the Coachella Valley.

Deferred-deposit loans typically involve a customer writing a postdated check that includes the fee and principal. They receive cash in return.

The legislation would limit the number of payday loans to any one borrower in a year. It also would require lenders to review borrowers’ ability to pay off their loans and to let borrowers pay off the loans with an installment plan, among other provisions.

Supporters of the bill, including the Oakland-based Center for Responsible Lending, say the measure would make the loans safer for consumers and help prevent a “payday debt trap” of repeated loans.

Opponents of the bill, including the Greater Riverside Hispanic Chamber of Commerce, say the rules would would ruin the industry and take away a source of credit used by millions of customers. It would drive people who need money to unregulated online sites, critics claim.

By: Jim Miller

Category:Cal Senate

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Jim Miller

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Political Empire Blog: PE Politics Team
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Alternative Business Loan Programs Win Attention of Yellowstone Capital LLC

NEW YORK, NY–(Marketwire – Mar 25, 2013) – Financial tumult has left small business loans relatively difficult to come by in recent years, particularly loans from traditional banks and lenders — but a company called Yellowstone Capital LLC is highlighting some innovative new alternative loan programs. The company points to a recent article from Patch, which notes that small businesses in the Lehigh Valley region of Pennsylvania and New Jersey are invited to apply for microloans, under a new program made available through the Boston Brewing Company and The Rising Tide Community Loan Program. Yellowstone Capital LLC has issued a new statement to the press, celebrating this alternative loan program.

Patch reports that local companies working in the food, beverage, and hospitality industries are eligible for these microloans. The program has officially been christened “Samuel Adams Brewing the American Dream.” It is currently targeting credit-challenged businesses in these different industries, seeking to assist them via loans, business coaching, mentoring, and even educational resources.

Yellowstone Capital LLC — a company that is zealous for helping small businesses succeed — has issued a new press statement that praises this new initiative. “The Boston Beer Company is taking the responsibility of supporting small businesses upon itself, because traditional banks are noticeably absent in this crucial time for American small business,” the company notes. “Here at Yellowstone Capital, we are proud to say that helping credit-challenged small businesses in America is our one and only goal. It’s what we do and why we are in business. Small business is the backbone of the American economy and too many are falling to the wayside while the banks that were supposed to be helping them simply can’t, or more disturbingly, won’t. It is our charge and in fact, our responsibility to help those small businesses who have been turned down by banks in this tight credit economy.”

Indeed, Yellowstone Capital LLC is a nationally-known company that specializes in providing alternative business loans to companies in various industries.

Patch notes that the Samuel Adams program differs from many similar small business loan programs because the loans are offered along with in-depth mentoring and expertise. The program was designed to foster meaningful, lasting relationships with the small businesses that opt to participate.

Yellowstone Capital LLC, meanwhile, is known for its committed team of industry professionals, and for its myriad direct lending services. Yellowstone Capital is passionate about helping small companies, and as such, it employs three in-house funders and is also partnered with business cash advance companies across the nation.

ABOUT:

Yellowstone Capital LLC is a nationally-recognized company that specializes in providing alternative business loans to promising entrepreneurs. Yellowstone boasts an expert team, with combined decades of experience in the industry. As a direct bank, Yellowstone Capital currently has three in-house funders, concentrating on specific advance types; the company is ultimately zealous for assisting businesses of all kinds, however, and so it has partnered with 16 cash advance companies from across the country. These successful partnerships are what allow Yellowstone Capital LLC to get deals done, and ultimately to put the needs of its business clients above all else.

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