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8 On Your Side: Bill could remove payday loan protections

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LAS VEGAS – Taking out a payday loan is rarely a good idea. Many companies charge high interest rates, and customers can easily get in a trap where they spend years paying off the loans.

If you get a payday loan, be warned. These companies may soon have more leverage over customers. Nevada law offers consumers some protections from payday loan companies, but that could change.

If Senate Bill 123 passes, it would allow payday loan companies that offer long-term loans to sue customers who default on their loans.

“Somebody can get sued after paying for twelve to fourteen months on this loan, and then get sued at the end for more interest,” said consumer advocate Venicia Considine.

Considine says this can hurt payday loan customers who are already strapped for cash.

“The average income nationally of people who go to payday loan lenders is about $22,400 a year,” she said.

Considine says she feels the current laws obligate lenders to ensure anyone they give money to can pay it back. Senate Bill 123 would change that, and it could keep people trapped in a cycle of debt for a long time.

“It’s a lose-lose for the consumer,” she said.

You can voice your opposition to the bill by contacting your state lawmaker.

If you are in trouble with payday loans, the Legal Aid Center of Southern Nevada can help. Their services are free.

If you have a problem you want investigated, contact 8 On Your Side at 702-650-1907.

[…]

Local woman has warning about payday loan scam

Las Vegas, NV (KTNV) — Most of us need a little extra cash in our pocket from time to time. When funds are low, some turn to a payday loan company.

But as one Las Vegas woman recently learned, you’ve got to be careful about who you do business with.

“So it’s just been really, you know, I’m having a hard time,” said Sandra Pickens.

She said money is tight. She’s been out of work for the last nine months. To cover her expenses, Sandra said she applied for a payday loan.

“Just did a Google search you know, put in a general application,” said Sandra.

Sandra said she applied through an unknown service, that sent her application to a number of loan providers. Shortly after, she got a call from someone claiming to be a lender.

“I couldn’t understand what he was saying. I’m like, excuse me. What do I need to do? Who are you calling from?” said Sandra.

The person told Sandra she was approved for a $2,000 loan. But before getting the money, Sandra was told she’d have to pay an up front fee of $200.

“He’s like, well we need you to go purchase a prepaid card, like Green Dot, and put $200 on the card and then call us back,” said Sandra.

She said the request raised a red flag. Not only did she feel uncomfortable sending money, but she explained, she didn’t have $200.

“He was like can’t you go borrow it from your friends and family? And I’m like if I could, I wouldn’t be borrowing it from you,” said Sandra.

That’s when Sandra hung up and decided to reach out to Contact 13. She wants to make sure others know who they’re applying with, when looking for a payday loan.

“He had all my personal information. My date of birth, my social, where I live. I’m just glad I got the sense, to, I’m not sending them any money,” said Sandra.

Here’s the contact 13 bottom line: The Federal Trade Commission says if you’re told to pay a fee in advance for a loan, then it’s a scam. Never send money to someone you don’t know with a prepaid credit card or through a wire service.

Once that money is sent, it’s gone for good.

[…]

All-Cash Share of U.S. Home Sales Pulls Back From 3-Year High, Institutional Investor Share Drops to 3-Year Low

IRVINE, CA–(Marketwired – Aug 19, 2014) – RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its Q2 2014 U.S. Institutional Investor & Cash Sales Report, which shows all-cash sales accounted for 37.9 percent of all sales of single family homes and condos nationwide in the second quarter, down from a three-year high of 42.0 percent in the previous quarter but still up from 35.7 percent a year ago.

The report also shows that sales to institutional investors — entities that purchase at least 10 properties in a calendar year — accounted for 4.7 percent of all sales of single family homes and condos in the second quarter, down from 5.3 percent in the previous quarter and down from 5.8 percent a year ago to the lowest level since the first quarter of 2012.

“The flurry of purchases by institutional investors and other cash buyers that kicked off two years ago when U.S. home prices hit bottom is finally showing signs of subsiding,” said Daren Blomquist, RealtyTrac vice president, noting that the U.S. median home prices bottomed out in March 2012. “Over the past 10 quarters cash sales have accounted for 39 percent of all home sales on average, and institutional investor purchases have accounted for 5.3 percent of all home sales on average. Prior to that, from 2001 to 2011, the average quarterly cash share was 30 percent, and the average quarterly institutional investor share was 2.6 percent.”

“This is a classic good news/bad news scenario for the housing market,” Blomquist continued. “The good news is that fewer cash buyers should help loosen up inventory of homes for sale and reduce competitive bidding, giving first time homebuyers and other non-cash buyers more opportunities. The bad news is that some of those first time homebuyers and other non-cash buyers may already be priced out of the market thanks to the rapid run-up in home prices over the past two years in many areas.”

Cash sales account for larger share of very high-end, low-end and distressed sales
The report shows that U.S. cash sales hit a recent peak of 45.8 percent of all home sales in the first quarter of 2012, when home prices bottomed out, but were down to as low as 34.0 percent of all sales in the third quarter of 2013 before jumping to 36.6 percent in the fourth quarter on the heels of the rise in interest rates and jumping again to 42.0 percent of all sales in the first quarter of 2014, when new qualified mortgage rules from the Consumer Financial Protection Bureau took effect.

Cash sales in the second quarter were skewed higher on both ends of the home price spectrum. Cash sales accounted for 67 percent of purchases of homes selling for $100,000 or less, and cash sales accounted for 45 percent of purchases of homes selling for more than $2 million.

Cash sales represented a larger share of distressed sales, with 49 percent of bank-owned sales, 61 percent of sales of properties in the foreclosure process, and 96 percent of sales at the foreclosure auction. By comparison, non-distressed home sales were 36 percent all-cash.

Cash sales more than half of all sales in Miami, New York, Detroit, Atlanta, Las Vegas
Among metropolitan statistical areas with a population of at least 500,000, those with the top six highest percentages of cash sales were all in Florida: Miami-Fort Lauderdale-Pompano Beach (64.1 percent), Cape Coral-Fort Myers (62.1 percent), Sarasota-Bradenton-Venice (61.5 percent), Tampa-St. Petersburg-Clearwater (54.6 percent), Lakeland (53.0 percent), and Orlando-Kissimmee (52.2 percent). All six metros posted a lower all-cash share of sales than the previous quarter and a year ago.

Other major metro areas with an all-cash share among the top 20 highest nationwide were Las Vegas (50.7 percent), New York (48.2 percent), Detroit (47.7 percent), Kansas City (46.8 percent), Philadelphia (45.1 percent), and Cleveland (45.1 percent).

Analysis of percentage of cash sales with subsequent financing
RealtyTrac analyzed more than 7,500 all-cash transactions for single family homes in Orange County, Calif., between January 2013 and July 2014 to determine what percentage of the properties purchases were subsequently financed by the buyer.

The analysis found that 10 percent of those all-cash purchases had some sort of subsequent mortgage taken out by the owner who purchased with cash. The subsequent financing was recorded on average 136 days after the sale of the property was recorded.

Institutional investor share increases in Las Vegas, Jacksonville, Columbus, Miami
Among metropolitan statistical areas with a population of at least 500,000, those with the highest share of institutional investor purchases in the second quarter were Atlanta-Sandy Springs-Marietta (15.6 percent), Las Vegas-Paradise (14.4 percent), Jacksonville, Fla., (12. 5 percent), Memphis, Tenn. (12.0 percent), and Charlotte-Gastonia-Concord (11.3 percent).

Although Atlanta documented the highest share of institutional investor sales in the second quarter, its 15.6 percent share was down from a 20.6 percent share in the first quarter and a 16.5 percent share in the second quarter of 2013 — following nine consecutive quarters with year-over-year increases in Atlanta’s institutional investor share.

The institutional investor share of home purchases were also down from a year ago in Memphis and Charlotte, but increased from a year ago in Las Vegas and Jacksonville, bucking the national trend.

Other metro areas among the top 10 for institutional investor share with increases from a year ago were Knoxville, Tenn., (10.0 percent compared to 6.9 percent a year ago); Columbus, Ohio (9.2 percent compared to 6.9 percent a year ago); and Miami (8.2 percent compared to 6.7 percent a year ago).

Institutional investor breakdown: price, foreclosure status, financing and bulk sales
The report shows that the second quarter share of institutional investor purchases was the lowest since the first quarter of 2012, when they represented 4.6 percent of all U.S. home sales. The peak in institutional investor share of all sales was 6.0 percent in the first quarter of 2013.

In the second quarter institutional investors purchased homes at an average sale price of $147,017, while the average estimated full market value of the homes purchased was $164,553 at the time of the sale.

The majority of purchases made by institutional investors in the second quarter were all-cash (79 percent) and not in any stage of foreclosure or bank-owned (80 percent). Of the remaining 20 percent, 7 percent were bank-owned, 11 percent were scheduled for a foreclosure auction, and 2 percent were in default with no foreclosure auction date set.

Analysis of institutional investor bulk transactions on single family homes
Among the 29,444 single family homes purchased by institutional investors in the second quarter, 8,856 (29 percent) were bulk transactions involving multiple properties sold on the same date from the same seller and to the same buyer. The 29 percent bulk transactions was down from 31 percent in the previous quarter but still up from 19 percent a year ago.

An analysis of the buyers and sellers involved with the bulk transactions indicated that most of the bulk transactions involve an institutional investor with multiple corporations purchasing properties that are consolidating all of those properties under a single ownership name. A detailed breakdown of buyers and sellers involved in these bulk transactions is available upon request.

Report methodology
The RealtyTrac U.S. Institutional Investor & Cash Sales Report provides percentages of all sales that are sold to institutional investors and cash buyers, by state and metropolitan statistical area. Data is also available at the county and zip code level upon request. The data is derived from recorded sales deeds and loan data. Statistics for previous quarters are revised when each new quarterly report is issued as more deed data becomes available for those previous months.

Special note on methodology change in second quarter of 2014: RealtyTrac adjusted its methodology for calculating cash sales, changing how loan coverage was determined and eliminating data from one of the data providers used in the past.

Definitions
All-cash purchases: sales where no loan is recorded at the time of sale and where RealtyTrac has coverage of loan data.

Institutional investor purchases: residential property sales to non-lending entities that purchased at least 10 properties in the last 12 months.

Report License
The RealtyTrac U.S. Residential & Foreclosure Sales report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Data Licensing and Custom Report Order
Investors, businesses and government institutions can contact RealtyTrac to license bulk foreclosure and neighborhood data or purchase customized reports. For more information contact our Data Licensing Department at 800.462.5193 or datasales@realtytrac.com.

About RealtyTrac
RealtyTrac is a leading supplier of U.S. real estate data, with nationwide parcel-level records for more than 129 million U.S. parcels that include property characteristics, tax assessor data, sales and mortgage deed records, Automated Valuation Models (AVMs) and 20 million active and historical default, foreclosure auction and bank-owned properties. RealtyTrac’s housing data and foreclosure reports are relied on by many federal government agencies, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.

FinanceReal EstateRealtyTracInstitutional Investor […]

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The Unfavorable Areas Of Online Payday Loans | Everything Dies …

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High-interest lenders need more, not less, supervision

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Sam Morris / Las Vegas Sun

Photos show some of the payday loan businesses located on a stretch of Charleston Boulevard between Eastern Avenue and Rainbow Boulevard.

Tuesday, Oct. 16, 2012 | 2 a.m.

J. Patrick Coolican

Third of Las Vegans do ‘banking’ with pawn shops, payday lenders (09-12-2012) More columns by J. Patrick Coolican More political stories More business/economy stories

Joann Little had a terrible streak of luck about five years ago. She was supporting a daughter in college when she was forced out of an apartment because it was being converted into a condominium and all the residents had to move.

Then she rented a condominium, but the owner went into foreclosure, requiring another expensive move. All the while she was fighting breast cancer, which meant added medical bills.

She was surviving but then made a terrible error: She took out a $300 payday loan from Handy Cash Loan Center at more than 1,000 percent annual interest. She paid and paid but could never get it to zero, especially when she was laid off from her job as a radiology transcriptionist at Valley Hospital.

Little is among thousands who turn to high-interest, alternative financial products such as Handy Cash. That’s obvious from driving around the Las Vegas Valley — payday lenders and title loan stores seem to anchor every other shopping center, and not just in working-class neighborhoods. There are 421 branches of high-interest loan licensees in Nevada, most here in the Las Vegas Valley, according to the Nevada Department of Business and Industry.

According to the results of a recent survey by the Federal Deposit Insurance Corp., Nevada leads the nation in the percentage of residents who are “underbanked” — meaning they have some sort of bank account but also resort to high-interest loans from nontraditional lenders to make ends meet. In theory, a borrower uses these services to tide him or her over until the next paycheck because he or she doesn’t have access to a bank loan or credit card. One-third of Las Vegas Valley residents use these services.

This is worth considering as Congress mulls loosening regulation of an industry that its critics charge is by nature predatory and traps borrowers in high-interest debt — a legalized usury that redistributes money up the income ladder from the working classes to the lenders. According to a recent report from the Pew Charitable Trust, the average borrower takes out eight $375 loans per year and spends $520 on interest.

In a large study of Oklahoma borrowers, 80 percent of borrowers took out more than one loan in a year, and of those, 87 percent received new loans within the same pay period as receiving the previous loan.

According to a 2011 study from the Center for Responsible Lending, “In their first year of payday loan use, borrowers are indebted an average of 212 days. Over the full two-year period, borrowers are indebted a total of 372 days.”

Consumer advocates say borrowers end up on a debt treadmill, using one loan to pay another or paying off a loan but quickly needing another, all the while racking up interest and fees.

The industry rejects the idea that its borrowers are in a debt trap and says it provides emergency credit to people who can’t get it from traditional sources.

Amy Cantu, spokeswoman for the payday lenders trade group Community Financial Services Association of America, said, “We’re seeing that consumers are making a clear choice to use our product because they like the product. They weigh different products and consider the costs and consequences, and in many cases the payday loan can be a less expensive option than unregulated loans or overdraft fees from a bank. They are looking for a product that will cause them the least pain to overcome their short-term financial difficulty.”

David Stoesz, a professor at Mississippi Valley State University, wrote a paper casting doubt on the notion of a debt treadmill. In a phone interview, he told me his working hypothesis is that some consumers use the alternative lenders rarely and pay off the loan immediately; another subset find it useful but sometimes get in trouble; a final subset are abused by the system, using multiple lenders and seeing their circumstances exacerbated by the high-interest loans. He said we need more evidence to evaluate the exact breakdown.

Stoesz said that given that most loans are paid off rapidly, it’s possible that people might take out multiple loans not because they are using one loan to pay off another, as in a debt treadmill, but because they are in a state of perpetual economic crisis. In this formulation, the borrower determines that a high-interest loan is worth it if it means fixing an old car that will allow them to get to work or preventing a utility shutoff.

Still, Stoesz is by no means sanguine about the industry, especially in the absence of proper regulations to curb abuses: “Unregulated, the fringe economy not only adversely affects the poor but also diverts a significant portion of social welfare funds — perhaps as much as 10 percent — to companies that market financial products with high fees and interest rates. As a result, too many low-income households find themselves in an economic vortex that spirals downward with increasing velocity.”

This is worth considering as Congress mulls loosening industry regulation.

Although legislation won’t pass this session, a bipartisan group of legislators is clearly trying to build momentum for future sessions. House Resolution 6139 would create a federal charter for these financial products under the supervision of the Office of the Comptroller of the Currency. Why? To begin with, the legislators are seeking to shield the high-interest lenders from the Consumer Financial Protection Bureau, the new federal agency charged with regulating financial products and whose aim is to prevent the kind of predatory lending that has become all too common in recent decades.

As it happens, the Office of the Comptroller of the Currency thinks this is a terrible idea. Grovetta Gardineer, deputy comptroller for compliance policy, testified before Congress on the bill, saying the entire business model is “dependent on effectively trapping consumers into a cycle of repeat credit transactions, high fees and unsustainable debt.”

The bill also would strip away the requirement that lenders reveal the annual percentage rate of a loan, a 40-year-old Truth In Lending Act provision.

Most important, the proposal would cripple Nevada’s attempts to regulate the lenders. Barbara Buckley, former speaker of the Nevada Assembly and primary author of Nevada’s own consumer protection law in this realm, is the executive director of Legal Aid of Southern Nevada. She wrote a letter to Sen. Harry Reid in July asking for his help to stop the deregulation: “By getting a (federal) charter, companies could evade state consumer protections that are not replaced by equivalent or stronger federal law …”

Nevada’s own law has been instrumental in stopping the worst abuses. Like Little, Jeannie Richard also took out a payday loan from Handy Cash. Though gainfully employed in medical billing, she was a single mom supporting three children plus three grandchildren when she was laid off after 22 years on the job in 2007. Her unemployment compensation was $1,300, but she was paying $1,150 in rent. “I was barely struggling to keep our family from becoming homeless,” she said.

Even after Little and Richard went into default, Handy Cash continued to charge more than 1,000 percent annual interest, plus additional fees, which violated Nevada law.

No surprise there; truly predatory lenders seek to lend to borrowers whose ability to repay is questionable.

I asked George Burns, the commissioner of the Financial Institutions Division of Nevada’s Department of Business and Industry, why lenders would give a loan to someone who can’t repay. In an email, he responded: “Those borrowers who cannot afford to repay all principal and interest end up on a ‘debt treadmill’ and keep paying high interest, for extended periods of time, that may end up being a multiple of the amount originally borrowed. The profit margin can still be lucrative in these circumstances.”

Under Nevada’s statute, Handy Cash was illegally overcharging Little and Richard. Once in default, the lender can only charge the prime interest rate plus 10 percent, not the more-than-1,000 percent that it was charging.

(The law also doesn’t allow lenders to seek criminal sanctions against borrowers for passing what amounts to a bad check, another key consumer protection.)

Legal Aid of Southern Nevada filed a class-action lawsuit against Handy Cash over the interest rates and fees it charged.

Legal Aid won.

The owner of Handy Cash declared bankruptcy, but because the law required him to provide a surety bond, the borrowers still received a small amount of compensation.

Cantu said Community Financial Services Association of America members — including 11 in Nevada comprising 100 storefronts — have created industry standards to prevent abuses. She also said the members welcome both state and federal regulation and have taken no position on the proposed federal law because the bill would only affect lenders who make loans of more than 30 days. Consumer advocates are skeptical and suspect the payday lenders would begin writing 31-day loans if it means less regulation.

I went to a financial services hearing recently as the division considered regulatory changes for high-interest lenders. Ever since the Buckley statute, NRS 604A, became law, there’s been a constant push and pull with regulators and subsequent legislative sessions.

It was a bit surreal, a bunch of people in business suits and crisp shirts debating the finer points of gouging the desperate.

Given the sheer number of Nevadans who are using these loans, we need people such as Buckley and Burns to prevent the worst abuses.

That means killing HR 6139 with due haste.

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Decode the Scene GAME – Brad Pitt George Clooney Elliott Gould …

Brad Pitt George Clooney Elliott Gould MOVIE CLIPS click to subscribe j.mp Rusty (Brad Pitt) is shocked when he finds an emotional Danny (George Clooney) watching “Oprah.” TM & © Warner Bros. (2012) Cast: George Clooney, Brad Pitt Director: Steven Soderbergh MOVIECLIPS YouTube Channel: j.mp Join our Facebook page: j.mp Follow us on Twitter: j.mp Buy Movie: j.mp Producer: Bruce Berman, Frederic W. Brost, Susan Ekins, Gregory Jacobs, Robin Le Chanu, Jerry Weintraub Screenwriter: Brian Koppelman, David Levien, George Clayton Johnson, Jack Golden Russell Film Description: Cinema icon Al Pacino joins a powerhouse cast headed by of George Clooney, Brad Pitt, Matt Damon, Andy Garcia, Don Cheadle, Bernie Mac, and series newcomer Ellen Barkin for this, the third installment of director Steven Soderbergh’s popular series of glitzy crime comedies. The only hotelier in Las Vegas who can claim that each and every one of his establishments has earned the Royal Review Board’s Five Diamond Award, Willy Bank (Pacino) has made more than his share of enemies during his impressive ascent. While most of Bank’s adversaries amount to little more than the occasional nuisance, however, this powerful player is about to find out that picking your enemies in Las Vegas can be a true gamble. In betraying Reuben Tishkoff (Elliott Gould), Bank has finally crossed the one man who could bring his entire empire crumbling to the ground — Danny Ocean (Clooney). Now Reuben is in critical condition, and Ocean

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