Tag Archives: Predatory Lending

Why You Shouldn’t Get a Reverse Mortgage Just Because Fred Thompson Tells You to

by Ashlee Kieler, Consumerist

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Reverse mortgages have been found to leave families with debts they can never repay, four-in-five payday loans are made to consumers already caught in the debt trap, and on average 54% of students who attend a for-profit college leave without a degree — with one-in-five of those students defaulting on their loans. … Consumers Union, along with California Advocates for Nursing Home Reform provided comments to the Consumer Financial Protection Bureau regarding consumers’ use of reverse mortgages. Read More ›

CFPB Finds Older Consumers Face Illegal, Harassing Tactics from Debt Collectors

by Ashlee Kieler, Consumerist

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A new report from the Consumer Financial Protection Bureau shines light on the issues older consumers face when it comes to their financial well-being. According to the report, which looked at older consumers’ complaints filed with the CFPB between July 2013 to September 2014, the number one issue Americans 62 years of age and older faced involved their experiences with debt collectors. The CFPB issued a consumer advisory including tips for older Americans faced with debt collection. Read More ›

Private Student Loan Companies Provide Few Options for Borrower, Driving Them to Default

by Ashlee Kieler, Consumerist

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Officials with the CFPB say these shortcomings reflect an industry that has done little to make good on commitments by lenders to expand alternative repayment options. “The response by the private student loan industry to distressed borrowers is failing to help them avoid default,” Rohit Chopra, CFPB student loan ombudsman says in the report. “Too many borrowers are barely treading water, losing hope that these companies will throw them a lifeline.” Read More ›

Online Payday Lenders Are Often ‘Fraudulent and Abusive,’ Study Finds

by Herb Weisbaum, Today

Consumer advocates have long advised against payday loans because of the steep fees and the lump-sum repayment requirement. Pew’s research shows that the average person who takes out one of these two-week loans is actually in debt for five months of the year. This new report makes it clear that the potential for problems is much greater when the transaction takes place online rather than at a store. And if something does go wrong, it’s often a lot harder to deal with it. If you have a problem with an online payday lender, file a complaint with the Consumer Financial Protection Bureau. Read More ›

BofA ordered to pay $1.3 billion over Countrywide lending program

by E. Scott Reckard, Los Angeles Times

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A New York judge ordered Bank of America to pay nearly $1.3 billion in penalties in a civil fraud case involving a mortgage program that Countrywide had nicknamed “the hustle,” which fast-tracked the processing of mortgage applications. After a monthlong trial, a jury decided last fall that BofA and Countrywide were liable for selling thousands of bad loans to Fannie Mae and Freddie Mac. The lending program fast-tracked mortgage applications from August 2007 through May 2008. Shortly thereafter, Bank of America bought Countrywide, the nation’s largest home lender at the time. Read More ›

The CFPB has only just begun tackling financial services in its first four years

by Ashlee Kieler, Consumerist

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Four years ago, the Consumer Financial Protection Bureau was created as a safeguard to ensure the financial industry followed the rules when selling products and services to consumers – and a lot has happened since that time. From returning billions of dollars to consumers who were wrong by financial services to holding for-profit colleges accountable for their deceptions, the work of the CFPB has touched many areas of the financial world and it continues to expand. While the CFPB has provided assistance to millions of consumers in its short time, there is undoubtedly more issues to be addressed. Read More ›

Debt settlement programs are misleading

by Charlene Crowell, Houston Forward Times

The Center for Responsible Lending finds that debt settlement is a risky strategy that can leave consumers more financially vulnerable and still laden with debt years after they enroll in such programs. Many creditors simply refuse to deal with debt settlement companies. Available data suggests that at least two-thirds of debts must be settled in order to achieve a net positive outcome from debt settlement. Even more debts must be settled for the consumer to achieve real savings if they end up being liable for taxes on the debt reduction. Read More ›

Nasty surprise for some student loan borrowers

by Herb Weisbaum, CNBC

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Students who take out private loans to pay for college could face a nasty surprise if their co-signer dies or files for bankruptcy: The lender may suddenly demand the loan be paid in full—or even worse, put that loan in default—even though all payments are being made on time. The Consumer Financial Protection Bureau issued a consumer advisory on Tuesday, warning borrowers that these “auto-default” clauses may be in their loan agreements and serious financial consequences could result. Read More ›

Friendly sales pitch can’t hide payday loans’ unfriendly rates

by David Lazarus, Los Angeles Times

Welcome to the new-and-not-so-improved world of payday lending, which has adopted more sophisticated sales pitches and branding to lure unwary consumers into loans that can trap them in endless cycles of debt. Read More ›

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