AG’s Take Action on CWN Reports of Foreclosure Abuse
April 29, 2009
Several Attorneys General nationwide are taking action in response to information readers provided to Consumer Warning Network. CWN recently reported that it sent to state prosecutors in 39 states complaints it had received from victims of mortgage fraud throughout the country. CWN asked that the fraudulent mortgage lenders be held responsible for the terrible consequences contributing to the skyrocketing foreclosure rate.
Some states have already started taking action.
Does Buying a Hybrid Car Make Money Sense?
April 24, 2009
By John Newcomer:
Are Hybrids Worth the Premium Price?
The recent pain of $4 a gallon gas is still fresh, so fuel economy is an important factor in any car purchase. Everyone knows about hybrid cars and what great gas mileage they get. So the question is — are they worth the premium price you must pay to own one?
A few years ago the Toyota Prius was the car to own. But a funny thing happened in the last three years. The old internal combustion engine car improved. Yes, the hybrid still gets better gas mileage, but not that much better.
The 2009 Prius gets an estimated 45 miles per gallon (combined city and highway) as does the Honda Civic Hybrid. The Honda Insight Hybrid gets 43 MPG. But comparable non hybrid cars such as the Toyota Corolla and the Ford Focus get a combined city/highway mileage of 35 MPG.
Gas Prices are a Key Factor
Leaving environmental concerns out of the equation, the question is how high must gas prices soar to justify paying the higher price a hybrid car commands?
Generally a hybrid car costs about $8,000 more than its comparable counterpart. A Prius lists for $22,700 and the Honda Hybrid Civic lists for $23,650. A standard Toyota Corolla lists for $15,350 and the Ford Focus lists for $15,500.
Before doing the math three assumptions need to be made:
- First is that you will keep the car for 5 years.
- The second is that you will drive an average of 1,500 miles a month.
- The last is that the hybrids will continue to hold their higher resale value.
This assumption may not hold true as electric and hydrogen fuel cars come to market. But for this exercise we will assume that the hybrid holds its higher resale value and that instead of having to overcome the $8,000 price difference you only will need to save $5,000 in gasoline prices to make the Hybrid a sound economical purchase.
So what is the answer? Brace yourself. To off-set the premium price of a hybrid automobile the price of gasoline will have to increase to $8.75 a gallon just to break even!
Cost Benefit Analysis
Click here for the formula so you can compare your present car or any other vehicles to a hybrid. Remember when you are working the equation, you have to use a common denominator (yes high school math was important).
Most people cannot justify the added cost of a hybrid. Going green we will need government incentives like tax breaks or a more reasonable price tag to make the decision more reasonable for the average person.
“Produce the Note” – 3 Little Words to Save Your Home
April 24, 2009
By Angie Moreschi:
Using the “produce the note” strategy is something all homeowners facing foreclosure can do. If you believe you’ve been treated unfairly, fight back. We have created templates for a legal request, a letter to your lender and a motion to compel to help you through the process. Read the step by step “how to” under the videos.
Special note: In some states, a lender can foreclose on your home without going to court. These are called non-judicial foreclosure states. You can still use the “Produce the Note” strategy in these states, but it takes a few more steps on your part.
Produce the Note – Steps To Follow:
A Sad Saga of Sallie Mae’s Servicing Skills: One Family’s Story of Enduring Loss and Harassment
April 23, 2009
At a time when Sallie Mae, the nation’s largest private student loan provider, is trying to convince our government that it should be trusted with a new ten year $2.7 billion student loan servicing contract, it is very troubling to hear stories of some of its past efforts at servicing student loans. Just ask Mr. and Mrs. Hesse of Houston, Texas.
Back in 2004, their son Sam took out a $22,000 student loan from Sallie Mae to attend college in England so he could achieve his dream of being a film critic. His mother Gretchen assisted him by co-signing the loan. When he finished his education, he came back to Texas, worked hard, and began paying back his student loan.
Sadly, on April 29, 2007, he died suddenly from myocarditis, an infection in his heart. His friends put together a moving tribute to Sam Hesse.
Foreclosure Roundtable: Frustration Leads to Promises of Help
April 22, 2009
By Angie Moreschi:
Homeowners are quick to tell Consumer Warning Network about repeated frustrations in trying to get mortgage lenders to work with them to avoid foreclosure. Now, the issue has the attention of a key government leader in Florida, the nation’s 2nd leading state in foreclosures. Click the story above to see Angie Moreschi’s report or click here to see that story and more.
CWN & Jesse Jackson Join to Fight Predatory Student Lending
April 17, 2009
Consumer Warning Network recently joined the Reverend Jesse Jackson in Chicago to fight against predatory student lending. Jackson has started a movement called Reduce the Rate to push for more affordable student loans. Watch the story above.
AIG Denies Claims While Dishing Out Bonuses
April 17, 2009
AIG, the insurance giant that got billions in bail-out dollars, is adding insult to injury. Not only did the company dish out millions in bonuses to top executives, while nearing collapse, it also denied claim after claim from injured people who had AIG insurance. These are the latest findings of an ABC News Investigation by Brian Ross.
ABC found that nearly one-half of AIG’S insurance claims were denied. In a joint investigation with 20/20, ProPublica and the Los Angeles Times analyzed some 30,000 claims filed by people working for American defense contractors overseas, covered by AIG under a federally-mandated program. Almost half – 43 percent – of the most serious cases were challenged by AIG, the analysis found, particularly those where claims were made for treatment of post traumatic stress disorder.
ABC’s 20/20 will have an indepth report on their findings tonight at 10pm.
Who is MERS and Why Are They Suing Me?
April 17, 2009
The Mystery Company that Forecloses on Homes
By Terry Smiljanich:
A homeowner takes out a mortgage with Wells Fargo. Two years later, she gets behind in payments due to unforeseen circumstances. That’s when a foreclosure suit lands on her doorstep, but instead of Wells Fargo, someone named “MERS” is trying to take her home. Just who in the heck is this “MERS,” and who asked it to get involved?
More and more homeowners are asking this question and, in the process, successfully challenging these foreclosure suits.
Read more
Double Billing: The True Cost of Selling Student Loans
April 16, 2009
By Jillian Estes:
Karen Mahnk did everything right in borrowing for college. She borrowed only low-interest federal loans, took out only what was needed to support herself and her son, and used only one lender to simplify repayment. So it’s hard to understand how Karen simply has no idea who owns her loans.
What Karen does know is that Sallie Mae has spent seven years sending bills but never sent proof of the debt, that Wachovia claims it’s still servicing that same debt and that a federal consolidation is her last hope for figuring out how to pay for her loans.
But, with a federal servicing contract threatening to send all the loans right back to a private lender, Karen fears this could start the vicious cycle all over again.
“It Must Have Been a Mistake”
In 1994, Karen Mahnk was a newly-divorced single mother who desperately needed a way to get her life back on track. Knowing that education was critical, Karen recalls that she was “so grateful that the money was available and for the opportunity to borrow what (she) needed to get by.” Like so many students, the debt added up quickly, but Karen was very careful to borrow only federally-backed, low-interest loans and to borrow every single loan from the same lender, Wachovia. She “just wanted it to be simple.”
So when a letter from lending giant Sallie Mae suddenly showed up in 2002, Karen assumed it was a mistake that would eventually work itself out. After all, the bill was only for two of the nearly dozen loans that she had borrowed, and there was no indication that Sallie Mae had actually bought the loans from Wachovia. It was naïve, she realizes now, but she just figured the lenders would figure things out on their own.
Karen realized she had a real problem in 2005 when her grace periods were over and bills were coming due. Sallie Mae and Wachovia were both still billing her and no matter how hard she tried, she couldn’t get the lenders to work together to figure it out who owed the loans. After so much confusion, Karen decided to just give up the fight and apply for a consolidation with Sallie Mae. They denied the request, claiming different reasons in different letters.
Turning to Wachovia as she had from the beginning, Karen applied for a consolidation for all of her loans, including the two that Sallie Mae had claimed. Her consolidation was approved and she has been faithfully paying on that debt ever since.
What happened next is up to the lenders to explain. Sallie Mae claims it was never paid for the loans, though it still has never shown that it has any legal claim to the debt. Wachovia claims to be servicing the loans in question, as they have from the beginning. And Karen is trapped in the middle, an unwitting pawn in the disastrous game of student loan securitization.
Looking For A Way Out
In March, Karen made one final act of desperation: she asked the government for help in the form of a federal loan consolidation. She knew that both lenders would likely submit a pay-off request, but even if it meant paying for the same loan twice, she just wanted to be done with the harassment and confusion once and for all. Karen received email confirmation that Sallie Mae had submitted their pay-off request as of March 19, so she thought her fight would finally be over.
She was wrong.
On April 6, Karen received two letters in the mail on the same day. The first one, from a Sallie Mae-owned bill collector, said it received notice of the federal consolidation on March 9 and that “all involuntary collections efforts were ceased at this time.” The letter seemed to be the long-awaited answer to Karen’s prayers.
The second letter, however, brought those short-lived dreams crashing back to reality. This letter, unsigned but on Sallie Mae letterhead, was dated March 27, almost three full weeks after Sallie Mae got notice of the pending consolidation and over a week after they demanded payment of the debt from the US government. Nevertheless, Sallie Mae indicated it would still be aggressively pursuing collections, including a veiled threat of wage and tax refund garnishment and a demand for $18,811.43 on a $10,000 loan.
The letters were sent four days apart, so she has no idea which one to believe.
“They’re Going To Do It Again”
Karen’s story provides a brief but alarming glimpse into the complex web that is the student loan industry. The guarantors, lenders, servicers and collectors are inextricably intertwined through ownership and business practices. Yet, when cooperation is required to resolve an individual loan issue, it seems as though every agency speaks a different language.
When a responsible borrower like Karen would rather pay a loan twice rather than try to fight any more, it’s a sign that the system is irreparably broken. Karen, like so many others, has become a prisoner in a broken system that is created by the lenders. And if the federal consolidation doesn’t work, then she has no way out.
If Sallie Mae or Wachovia are given free rein to continue these practices as federal loan servicers, these disasters are certain to happen again. Karen knows the repercussions of loan better than anyone, but she also knows it can get so much worse if the federal contract is granted and the system doesn’t get fixed. Karen’s fear is, “They’re going to do it all again. They’re going to figure out a way to commit even more fraud on the public, and with no consumer protections, there’s nothing stopping them.”
Don’t Get Spoofed! Caller ID Trick to Steal Your Identity
April 14, 2009
A new identity theft scam is giving crooks a way to scam you out of your money. Beware of “spoofing.” It’s a technology trick that lets a caller change the name and number displayed on your caller ID. Some con artists have recently been putting it to a pretty dirty use. They’re using “spoofing” to call victims, claiming that it’s their bank. People who bite give up sensitive details, giving the crook access to their bank account. ABC News Consumer Reporter Elizabeth Leamy did a great piece explaining the problem. Click the video above to see how it works or below to read more. And remember: Don’t get spoofed!
Banding Together and Fighting Back!
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