A telling sign of overconsumption can be seen in the now booming pawnshop business.

Carin Dillingham handed over her watch to the pawnbrokers at Society Hill Loan as if she were giving up one of her bones.

The 30-year-old bookkeeper stood pregnant, broke and sad under rows of pawned guitars hanging like curing hams from the ceiling of the ragged South Street shop. She got a $20 loan for her $200 Bulova, a gift from the Harley-Davidson Co., where she used to work.

"It feels so weird," said Dillingham, accompanied by her fiance, Pat Lapetina, 35, an unemployed ironworker doing painting jobs on the side. The couple recently moved to South Philadelphia from Florida to build a life.

"I worked hard for this watch. I'm middle-class, not poor. I can't believe I have to do this to buy gas."

"People are cleaning out their houses of gold, silver, whatever, to get money just to fill their cars with gas," said Nat Leonard, 51, whose grandfather opened Society Hill in 1929. "People are pawning out like crazy." "I've got business owners coming in to pawn things just to make their payrolls," Leonard said, incredulous. "I've never seen that before."

"Upper-income people are in pawnshops nowadays, needing money right away to meet payments," said Bill Stull, chairman of the department of economics at Temple University's Fox School of Business and Management.

"We are in an economy in which many people are living right at the margins, even middle- and upper-income people. They have little savings, they've borrowed so much, their credit-card bills are high, and their house values are going down."

Over at Carver W. Reed & Co., a pawnshop at 10th and Sansom Streets since Lincoln was president, more and more higher-echelon people are filing in, owner Tod Gordon said.

"The upper middle class is feeling the crunch like never before," he said. "They're bringing in diamonds and gold to pay for margin calls on stocks. There's a feeling of despair.

And the shop is holding 30 guitars, worth $170,000, that a Grammy Award-winning Philadelphia musician owned. "He bought a bunch of properties right when everything in the economy was hitting the fan," Leonard said. "I feel awful about it. I don't want to sell his stuff out."

Of course, as always, things are worse at the bottom of the ladder.

"I'm seeing people extending their loans, unable to pay back their $100 loans for diapers, food, medicine," said Bob Sink, owner of JR Auto Tags & Pawnshop in Bristol Township.

"These folks are making $10 an hour or whatever working at Home Depot and can't cut down on expenses any more," Sink said. "So they borrow against a gold chain or a new tool. The economy is really hurting them."

Also stung are young people, hitting pawnshops in unprecedented numbers.

"We never saw so many people in here 30 and younger," Society Hill associate Damien Robinson said. He spoke as a 22-year-old Neumann College graduate walked out with a $75 loan on her Dell laptop computer. "What are young people going to do for rent now that apartments are so expensive?"

Flea Market Boom

Online auctions show desperation amidst flea market boom.

The for-sale listings on the online hub Craigslist come with plaintive notices, like the one from the teenager in Georgia who said her mother lost her job and pleaded, "Please buy anything you can to help out."

Or the seller in Milwaukee who wrote in one post of needing to pay bills — and put a diamond engagement ring up for bids to do it.

Struggling with mounting debt and rising prices, faced with the toughest economic times since the early 1990s, Americans are selling prized possessions online and at flea markets at alarming rates.

To meet higher gas, food and prescription drug bills, they are selling off grandmother's dishes and their own belongings. Some of the household purging has been extremely painful — families forced to part with heirlooms.

"This is not about downsizing. It's about needing gas money," said Nancy Baughman, founder of eBizAuctions, an online auction service she runs out of her garage in Raleigh, N.C. One former affluent customer is now unemployed and had to unload Hermes leather jackets and Versace jeans and silk shirts.

At Craigslist, which has become a kind of online flea market for the world, the number of for-sale listings has soared 70 percent since last July. In March, the number of listings more than doubled to almost 15 million from the year-ago period.

Craigslist CEO Jeff Buckmaster acknowledged the increasing popularity of selling all sort of items on the Web, but said the rate of growth is "moving above the usual trend line." He said he was amazed at the desperate tone in some ads.

Christine Hadley, a 53-year-old registered nurse from Reading, Pa., says she used to be "a clotheshorse," splurging on pricey Dooney & Bourke handbags. But her live-in boyfriend left last year, and she has had trouble finding a job.

Piles of unpaid bills forced her to sell more than 80 items, including the handbags, which went for more than $1,000 on a site called AuctionPal.com. Now, except for some artwork and threadbare furniture, her house is looking sparse.

"I need the money for essentials — to pay my bills and to eat," Hadley said.

For LiveDeal.com, a classifieds and business directory site, for-sale listings for January through March rose 10 percent from the previous year.

"We can definitely detect economic stress on the part of the consumer," said John Raven, the site's chief operating officer.

On Craigslist, Buckmaster said, three of the four fastest-growing for-sale categories are tied to gas — recreational vehicles like campers and trailers, cars and trucks, and boats.

Donations to the Salvation Army were down 20 percent in the January-to-March period. George Hood, the charity's national community relations and development secretary, said that was probably partly because people were selling their belongings instead.

A Tank Of Gas, Then What?

Say you pawn your $200 watch for $20. That does not even buy a tank of gas. What do you do for your next tank of gas?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

 In today's fast-moving and ever-changing business environment, mistakes can be fatal. Even at best, statistics show that about half of small businesses  last less than two years. My 20-plus years of successfully operating several retail stores have made me a keen observer of the retail scene, and more important, the mistakes made by many retailers that have, in many cases, caused their demise. Even though the list of potential mistakes that retailers can make is long, I have found these five to be some of the most frequent and devastating.

1. Failure to plan effectively and objectively: Many new retailers plunge into business with little more than a prayer and a lot of optimism. Take time to prepare a business plan and estimate your financial needs. Nothing kills a retail business quicker than underfunding. Planning should also include location, your market demographics and your product line. In Retail in Detail, I have included many worksheets and planning tools you can use to assess your prospects for success accurately.
   

Focusing on products and not the market: I've seen stores slowly stagnate because the owner stubbornly hangs on to a product or product line, even though the market has passed them by. You're in business to make a profit, not to sell a particular widget. Don't become married to your products. A word of caution is appropriate here: You shouldn't arbitrarily dump a product line because of seasonal or occasional setbacks. There are ways to update your product lines without ditching them entirely. For example, if you run a gift shop that carries home decor products, you need to update your product offerings regularly to stay in step with changing decorating styles.
Small retailers cannot effectively compete with big-box retailers and the internet on many standard over-the-counter products like small appliances and electronics and should concentrate instead on more individualized products and services. You can offer more personal service and more choices on custom-made and one-of-a-kind products, such as lamps, rugs, furniture, and locally produced merchandise.

Failure to change with the market environment: This is somewhat related to No. 2 above, but it's focused more on selling methods and media. Only a few years ago, movies were rented and returned at local video stores. Today, they're mostly rented online and/or by mail, or by downloading them directly to your computer. The latest trend is the $1 movie rental and return boxes at fast-food restaurants. The internet has dramatically changed many of our shopping practices, and customers are demanding more specialized and customized products and services, as well as comfortable venues in which to shop. Selling standard products off the rack from a plain-vanilla store environment rarely works anymore.

Underestimating the demands of retailing: Retailing is not for sissies. The demands of operating a successful retail store are many, constant and, frankly, all-consuming at times. Some would-be retailers mistakenly assume they can open and operate a retail store in their spare time. Retailing involves an endless cycle of buy, market, display and sell that can be extremely tiresome and demanding, especially for some personality types. It also means lots of long days and/or nights in the store selling and in the office ordering and paying bills. Of course, with success comes an increasing quality of life if you hire more employees to provide relief, but this in itself carries its own set of problems and demands.

So if you're not prepared to commit a large portion of your life, at least in the beginning, perhaps you should consider working part time at Wal-Mart.

Neglecting customer service: This may be the biggest cause of retail failure that I've observed. Some retailers think that customers are there for their convenience, not the other way around. I've seen retail businesses fail because they were located in inconvenient locations and because they didn't accommodate their business hours to customer needs. If you're targeting working people, for example, you probably won't succeed if you open at 10 and close at 3. One store I know of was often closed during published business hours, and the owner seemed unaware that such practices alienated customers. Another retailer located a store in a building that was convenient (and cheap) for them, assuming customers would seek them out. They didn't!

The other major sin in this category is failing to treat all customers with courtesy and respect. I'm constantly amazed at the treatment customers receive from retail employees. Things as basic as not greeting customers when they enter the store, offering help in merchandise selection, and ignorance about the store policies and stock are commonplace occurrences. This ain't rocket science! Train your employees--and yourself--on the basics of customer courtesy and service.

Although avoiding these five fatal mistakes won't ensure retailing success, committing them will surely bring you closer to the brink of failure. There are so many risks and pitfalls in today's rapidly changing marketplace, it makes sense to increase your odds of success by avoiding them.

By Ronald L. Bond    http://www.entrepreneur.com/management/operations/article193340.html

Seven years ago, Mandisa Bruce of Muskegon purchased a 1996 Oldsmobile Aurora for $11,831.

Today, she is being sued for $16,711 by a Southfield "sub-prime" auto loan company although the vehicle, which had sat unused in her driveway for years, was stolen and left burnt-beyond-use in Muskegon Township in 2006.

"I knew I spent too much for it when I bought it," said Bruce. "But I had just gotten a job in Grand Rapids and I needed transportation. I had bad credit so I knew it wasn't going to be cheap, but I didn't have a choice. I couldn't take the (MATS) bus to my job in Grand Rapids.

"But to pay $16,000 for a car that was five years old at the time and had more than 100,000 miles on it doesn't seem fair."

Such is the plight of the working poor who, because of lack of wages and good credit, are forced to work with those in the so-called "poverty business." Needing a quick fix, they often spiral deeper and deeper into debt.

From pawn shops to rent-to-own outlets to pay-day advance companies and urban corner stores with high-priced groceries, the "poverty business" is flourishing in the country and throughout West Michigan as the economy worsens and gas prices rise.

The Muskegon area has at least nine cash-advance outlets, four rent-to-own stores and four pawn shops that profit from charging high prices, fees or interest rates on the backs of people who have nowhere else to turn.

"People are in desperate situations when they walk in the doors of these businesses," said Tim Burgess, executive director of the Neighborhood Improvement Association, which works with low-income homebuyers in Muskegon.

"Some of what is done is legal and legit but evil," Burgess said. "They know they are taking advantage of those that are in need of real help."

BusinessWeek magazine in a story last year on the "poverty business" reported that payday lending companies have grown from 300 in the early 1990s to more than 25,000 today, with five of them major corporations traded on the New York Stock Exchange or NASDAQ. The "alternative financial services" sector, which services people with no credit or bad credit, represents more than $250 billion a year in loans, the magazine reported.

The question begs: Are businesses such as Golddiggers pawn shop on East Laketon or J.D. Byrider -- the national sub-prime auto king with an outlet in Muskegon -- serving the working poor who need quick access to cash, goods or cars or are they "preying" on their financial desperation?

It depends on who you talk to.

The woman who brought in a "mother's ring" to be pawned at Golddiggers on Monday was thankful for the $8 she received, though store owner Adam Pollock explained he couldn't pay more.

"I'll take it," said the woman, who asked not to be identified. "I need gas for my car."

When people take goods to a pawn shop, they are putting an item up for collateral for a cash loan and given so many days to recover the item at a stiff interest rate -- 35 percent at Golddiggers. Some just want the cash and never return to pick up their pawned items.

But Pollock said he is providing a service -- "I'm helping people get money so they can buy gas to go to work. You couldn't go to a bank and get a small loan of $100."

Pollock said it is a myth that people like him are getting rich at the expense of the poor. He said he gave $116,000 in loans last year, but after paying rent, his two employees -- who he pays $10 or $11 an hour -- had a better income than he.

Pay big, or do without

Mandisa Bruce, who also was housing her brother and his son, bought the Oldsmobile at MD Auto Sales, 5710 Holton with a "sub-prime" auto loan that was eventually sold to Automotive Credit Corp. of Southfield, Mich. Automotive Credit has been in the sub-prime auto loan business since 1992, purchasing loan contracts from independent dealers for "consumers with limited or challenged credit histories who are unable to obtain financing from traditional sources," according to the company Web site.

The loan agreement was for $10,350 after Bruce put $1,500 down on the five-year-old car. The 36-month loan had a 25 percent interest rate -- the legal limit under Michigan's usury laws -- for a monthly payment of $411.51.

That interest rate is typical for many local people seeking transportation, said MD Auto Manager Nick Davis.

"Due to the economy, our customer's credit is getting worse and worse," Davis said. "(Interest) rates go up when you have credit problems. It's like trying to get low insurance rates with two (drunk driving charges)."

For many low-income auto buyers, the option is to pay 25 percent interest rates or go without a car, which often is critical to keeping a job.

The poor folks' goals extend to sunset," said Dan Bonner, the managing attorney for Legal Aid of Western Michigan in Muskegon and a 25-year veteran in providing legal services to the poor. "Their judgments don't take into account the benefits of deferred decisions.

"Poor people don't have the patience ... sometimes they just can't wait," said Bonner, who has accepted Bruce's case as Automotive Credit attempts to collect. "There's a lack of impulse control. That sometimes is for survival."

Prior to seeing Bonner, Bruce -- whose car would not run anymore and who had incurred other large debts -- filed for bankruptcy. But because she missed two Grand Rapids court appearances, her case was dismissed, providing her no protection from creditors.

Bonner said that Automotive Credit left the Bruce case to linger, chalking up interest and penalties as time proceeded until finally filing suit in August of last year. Bonner wrote the Muskegon County 60th District Court: "This case seeks an amount from the defendant that exceeds (the total payoff with interest) by $2,000."

The legal aid attorney told the court in answer to Automotive Credit's complaint that Bruce surrendered the uninsured vehicle to the auto loan company at the time she filed for bankruptcy but the company did not pick it up from her house. The vehicle eventually was stolen and left as a burned-out shell in Muskegon Township.

Bruce's case is pending as dozens more mount throughout the area.

Automotive Credit has brought more than 170 similar collection cases in Muskegon County courts since 1996. Sub-prime auto loan businesses argue that high-interest rates cover the cost of bad loans that are more frequent with lower-income customers.

An endless cycle

When those in the "poverty business" go beyond the limits of Michigan law, the state's Attorney General's Office steps in on behalf of consumers through its Consumer Protection Unit, Attorney General Mike Cox told The Chronicle on a recent visit to Muskegon.

"Our mission is to look out for those who cannot look out for themselves," Cox said. "It's obviously reprehensible what some of these businesses will do. I believe in the free market but markets need to be fair."

Cox said his office has become involved in rewriting the payday loan laws and regulation of rent-to-own businesses in Michigan. But when it is outright fraud, the attorney general's office files criminal charges, Cox said.

That was the case in February when the state busted a $1.5 million food-stamp-for cash ring and brought charges against 27 people involved in eight convenience stores in Southeast Michigan. They had been giving cash to customers for food stamps at less than their value and turning them into the state for full pay.

Ripping off the vulnerable is a commonly seen by Paul Kurdziel, Assistant Principal at Muskegon High School who has been working with teen children of working poor families since graduating from Hope College in the mid-1990s. A 1992 graduate of Muskegon High School, Kurdziel is an expert on studying institutional racism.

"It is all part and parcel of the reality our kids here at Muskegon High are facing," Kurdziel said of poverty businesses. "Our students are facing what I did in high school but it is all upside down. Security, safety and shelter are so important. Their means to get it approximate mine, but it's all wrong."

Kurdziel says the sons and daughters of the working poor live in "Bizarro World" of DC Comic fame. He describes his students trying to act like their better-off suburban counterparts but coming up short. Take current fashion as an example: There are urban stores that sell "knock offs" of trendy brands and styles, cheap goods from Asia that have little lasting value, he said.

"Might they even get things at Wal-Mart?" Kurdziel asks. "They say that (Wal-Mart) is way over there. Mobility is a real issue if you don't have a car. They must go out of their way to get stuff that is right along our way."

In Bizarro World, urban students are left to buy at high-priced neighborhood corner markets, Kurdziel said. A Chronicle survey of prices found three such downtown convenience stores selling "groceries" had prices as much as 22 percent higher than Wal-Mart for 15 common items.

"The invisible hand of free markets doesn't take into account racism, sexism and ageism," Kurdziel said. "Our students are getting what they want, even if it's not what they need."

For someone struggling to get by, the lure of filling immediate needs is strong, those that counsel the working poor say.

"These people tell you what you need and what they can do to get it for you right now," Burgess said of those in poverty businesses. "The poor view some of these businesses as a solution. They would rather rob Peter to pay Paul and they will pay much more for it."

Today, Mandisa Bruce does not have a car, a home or a job. What she does have is her faith and sense of humor.

"It's as bad as ever but I can still laugh and still pray," said Bruce.

http://blog.mlive.com/chronicle/2008/04/seven_years_ago_mandisa_bruce.html

Posted by Dave Alexander The Muskegon Chronicle

If you happen to have a home warranty covering breakdowns in your air conditioning or plumbing leaks or electrical short circuits that you haven't used in a while, now may be a good time to call them up to make sure they answer the phone.

In the past few months, two home warranty companies have slipped out of business, leaving their customers out of luck with a broken appliance and out of an annual premium as well. United Home Warranty, based in Oakhurst, N.J., shut down overnight and disconnected its phones in March. U.A. Durr, a Metairie, La. warranty company closed its doors shortly after, blaming the lackluster real estate market for slumping warranty sales.

Traditionally, homeowners are first introduced to home warranties when they buy a property. It's common for a seller to throw in a warranty covering the basic home systems like plumbing, electrical and HVAC. At a cost of $350 to $700 depending on the level and length of coverage and the charge for a service call, warranties are usually considered cheap insurance for everyone in the transaction.

The Trouble With Problems

With homes taking longer to sell and spending more time vacant, a warranty can be a buyer's best friend. Problems can often occur when the plumbing/electrical systems are stressed with new owners after being unused for months. Facing a big repair even before you've thrown out the moving boxes can put a big damper on the new-home experience.

"Today, everyone's cash-strapped when they buy," said Jon Coile of Champion Realty in Severna Park, Md. "From a realtor's point of view, you don't want to sell someone a house and see them start having all kinds of problems with it, so the warranty makes sense."

Until fairly recently, most warranty companies marketed their contracts exclusively to realtors who made the recommendation of which warranty to buy. Other companies, such as American Home Shield, market their warranties to existing homeowners and provide services such as monthly billing. Homeowners generally have an option at the end of the annual contract to renew it.

How They Work, or Don't

Using a warranty is simple -- or at least it should be. Rather than calling a plumber at random when the tub refuses to drain, you call the company, which in turn calls a tradesperson they have contracted to work in your area, who then calls you to make an appointment. This works fine if you can use another tub in the house for a few days until all the calls have been made and the appointment set.

In an emergency situation, most warranty firms will work to prioritize your claim, but in some cases, such as if your air conditioning shuts down during a sweltering, state-wide heat wave, you may not have a choice but to wait it out.

Depending on your policy, the service call could range from being free to $75, and any charge beyond that is covered by the warranty company.

One troubling aspect of using a home warranty is you have no control over which contractors are used by the company. The friendly, talented electrician who fixed your ceiling fan last month may be replaced by a shady character who keeps eyeing your golf clubs as he repairs your garage door opener.

Another issue that can come up is the "replacement value" of an item. Many warranty contracts allow the company to offer, in case an item cannot be fixed, a check to you to buy a new appliance. However, there are many Better Business Bureau complaints that the amount offered will not buy a comparable appliance.

Handling Disputes

So what do you do if you've got a dispute with your home warranty company? If it's the policy you've had since you bought the home, hit them at their source. Talk to the real estate agent who sold you the property.

"In our case, we only sell the warranties of one company and we deliver them 500 or more new clients a year," said Coile. "If a past client comes to us and says the warranty is giving them problems, I'm on the phone with the warranty company the next minute. We don't want our reputation affected by their service."

If you've bought the warranty on your own and you're not satisfied, try your state consumer affairs department and department of insurance. "A good warranty company will work with you and will have a process where you can appeal to someone higher up," said Coile. "Those that don't are probably the ones that won't be around much longer."

The Better Business Bureau has issued a warning to small business owners who could fall victim to fraud schemes.

The Dayton BBB has picked up on reports of a number of scams attracting attention across the country, and the bureau is hoping a warning to Dayton-area business owners will prevent them from falling for the same Internet frauds.

BBB President and Chief Executive Officer John North said although much of the attention during the credit crunch has been focused on large companies, small businesses have been very susceptible to fraud, losing up to $26,000 each through Internet transactions.

"The Internet provides a perfect stage for fraud because bad actors in the loan industry can easily portray professional images that provide unsuspecting small business owners with a false sense of trust," North said in a news release.

The BBB identified several loan and grant offers small business owners should be aware of when looking for funding, including:

• Mediations LLC (also doing business as Innovations Northeast LLC) has been accused by several businesses across the country of charging substantial up-front fees for construction loans, but not delivering on the promised funds. Business owners have paid fees ranging from $1,500 to as high as $26,000 and were required to pay by wire transfer or cashiers check only. The BBB has advised small business owners to never pay large sums of money up-front to receive loans or wire payment for services, because there is no way to get money back from this type of scam.
• The National Small Business Alliance has been accused by business owners in 49 states of pre-approving small businesses for $8,000 credit lines for one-time membership fees of $99 to $149. The promised loans, however, turn out to be comprised of coupons, discounts and offers made by participating vendors to purchase goods and services using credit terms. Business owners have said the company continues to deduct money from their bank accounts without permission and doesn't refund money as promised. The BBB has advised business owners to be extremely cautious when providing bank account numbers and insist on reviewing offer details before making buying decisions and signing contracts.
• Capital Funding Programs, an online service that claims to link business owners with ways to pull in thousands in government money has been accused by business owners who said they were burned by online offers to receive government grant money. Small business owners have been required to pay several hundred dollars via wire or money orders, never hearing from the phony companies again. The BBB is warning business owners to stay away from programs that require money up-front. If a company qualifies for a grant, the U.S. government doesn't request payment as part of the application review or grant award process.

Dayton Business Journal   http://www.bizjournals.com/dayton/stories/2008/04/14/daily46.html?ana=from_rss

 

When a HELOC freezes over What to do if the bank tries to put your credit line on ice.

When Diane Carr, 55, received word in February that her home-equity line of credit would be canceled, she was dumbfounded. The HELOC had been open since 2003, when she bought her Woodside, Calif. home. And Carr had never even tapped it.

"It was just a security thing," she says. No matter. In recent months, tens of thousands of homeowners like Carr have been shut off from their equity as lenders try to stem losses from subprime mortgages and other high-risk loans.

As of September, delinquencies on HELOCs were up 47% year over year, according to Economy.com; the numbers are expected to be worse in 2008. In response, Countrywide has already suspended an estimated 122,000 lines, many in high-foreclosure-rate states, and USAA has frozen or reduced some 15,000 accounts.Bank of America (BAC, Fortune 500), Chase (JPM, Fortune 500) and Citibank (C, Fortune 500), among others, are following suit.

Not all HELOCs will be frozen or downgraded, but you can be sure lenders will scrutinize every account - including yours.

Know your risk. Areas where housing prices have fallen by 10% or more are prime targets for freezes, says Susan McHan, president of Opes Advisors, a mortgage banking firm in Palo Alto, Calif. Because of new lending standards, your HELOC could also be in danger if you bought your home in the past few years with little money down.

Last year consumers could easily borrow up to 100% of a home's value through a combination of a HELOC and a first mortgage. Today you'd be lucky to get up to 90%; 60% is the max in areas hit hardest by home-price declines.

Lenders are beginning to apply the same standards to existing HELOC customers. Call your bank and ask what the loan-to-value cap is on new HELOCs. If your house debt is above that, your line could be at risk. A change in credit score or a missed payment could also flag your account. Reread your contract to see if such factors allow the lender to cut you off.

Access cash now. If your line is in jeopardy and you need the HELOC to finish a renovation, you could draw a lump sum. On the downside, you'll cut your equity; you'll owe interest now; and if prices keep falling, your loan values could top your home's value. So borrow only as much as you need and put the cash in a high-yielding savings account or CD until the bills in question come due.

Fight for a defrost. The letter from your lender should explain why the line was suspended and how to appeal. Some banks use automated processes to identify troubled markets.

To prove that your house hasn't been affected, ask a realtor to pull prices for houses sold within three miles in the past six months, ask your mortgage originator to intervene, or have your house reappraised. The latter can run $400, but if you were counting on the line, it may be worth it.

If a change in your risk profile is the cause, check your credit reports. Carr was told that her HELOC had been canceled because of a drop in her FICO score. But when she checked, it was above 800, so the lender reinstated her line.

Compromise. If your efforts fail, ask for a lower credit line instead of a total freeze. The bank may be more amenable if you hold your primary mortgage there, as that's an insurance policy of sorts.

Shop around. Not all banks have the same standards. If you have at least 10% equity, you may qualify with another lender. Search at bankrate.com, or click on the link above and to the right.

 Solano County woman and her daughter are among a growing number of people who have lost their homes and thousands of dollars to scams targeting property owners facing foreclosure, a county official said Tuesday.

"This woman lost her house, and so did her daughter, and they gave the perpetrators $12,000, and their homes are still on the block," said Solano County District Attorney's Office investigator Sonny Ash.

It's part of a rash of kick-'em-when-they're-down schemes aimed at defrauding people desperate to save their homes, he said.

"Most of the victims we find are Hispanics with limited English." The criminals are also primarily Hispanic, he said. "It's the trust issue, and the language." They're vulnerable because of the same things that contributed to their getting into bad loans in the first place, Ash added.

To help combat the growing problem, Solano County officials are sending warning notices along with notices of default to homeowners who have gotten behind in their house payments, Ash said. The warnings are in English, but officials are working on a Spanish version, he added. The DA is also aggressively prosecuting real estate scammers, Ash said.

Realtor Jeff Dennis said he's heard anecdotes of such scams,

but knows of no local victims.

"I have heard of people who convince property owners they can save them from foreclosure, who then refinance the property, take the equity and the people still lose their home," Dennis said.

The latest version of the foreclosure scam has hit several surrounding counties, including Napa, officials said.

The perpetrators contact property owners who have gotten a notice of default - the first step in the foreclosure process - which is public record, Ash said.

The scheme is supposed to work by having the owner grant a small interest in the property to a sham business entity and pay a monthly fee. The fractional interest owner then files bankruptcy for the sham business to stop the foreclosure. But the bankruptcy is found to be fraudulent, the foreclosure continues, and the owner loses the property and the fees they paid the scammer, Ash said.

The Alameda County District Attorney has reportedly brought charges against two people who have targeted property owners in Alameda, Fresno and other counties, including Napa. The U.S. Attorney in Sacramento has indicted 19 people on similar charges. The United States Trustee office and the state Attorney General are also investigating this scheme, authorities said.

"We have gotten calls from people who have been approached for this scam, but no complaints from anyone who's fallen for it," Ash said. "We have had complaints from property owners who have been scammed by people doing a similar thing, but without the filing bankruptcy."

Ash said those facing foreclosure should contact their lender, not its collection department, to negotiate to save their homes. And there may be agencies that can help, but telling the difference between the legitimate and the criminal ones is very difficult, he said.

Anyone who thinks they've been targeted for this type of scam is urged to contact the district attorney's office or their local police department, Ash said. Officials in other counties are taking a similar approach.

"We urge property owners who are approached by perpetrators of this scheme to contact the Consumer Affairs Division of the Napa County District Attorney's office," said Napa County District Attorney Gary Lieberstein who is working with County Recorder John Tuteur on this issue.

By RACHEL RASKIN-ZRIHEN/Times-Herald staff writer

http://www.timesheraldonline.com/ci_8943809

A so-called payday loan helped a local woman get her car back on the road at a time when she was strapped for cash. But a year later, she says the loan put her in "financial quicksand" she has been unable to escape.

"I pay it back, but then I have to borrow it again or I won't be able to pay my other bills," said the Seabrook woman, who did not want to be identified.

A vicious cycle, she says, has caused her to take out 26 two-week loans last year at a fee that translates to an annual interest rate between 400 and 600 percent.

A two-week $100 loan would cost her $120, while a $450 loan would be $540.

"I think I probably have spent $1,800 in fees, but I have no other choice," she said.

Stories like hers is one of the reasons the payday loan industry is under attack all across the country.

Payday loans have been banned in 12 states, including Maine, Massachusetts and New York. Critics argue they profit from the poor, while supporters of the industry say they are providing a valuable and needed service.

In New Hampshire, there are 62 payday lenders who last year gave out $160,000 in loans. But starting in January 2009, that number of payday lenders could be down to zero.

Lawmakers passed a bill in February to put an end to excessive interest on payday loans in the state by capping it at 36 percent a year. The bill is scheduled to go into effect in January.

Those in the payday loan business say the new law goes too far. "We would have no other choice but to close our stores," said Jaime Fulmer, spokesperson for Advance America, which operates 20 stores in the New Hampshire, including one in Seabrook.

Fulmer said it would not be economically feasible to stay in business with a 36 percent rate cap. "Each one of our stores would lose $100,000 a year. The law is effective prohibition of the industry."

The industry, he said, has gotten a bad rap due to a small amount of people who misuse the loans. "The majority of the people who use our product use it responsibly," said Fulmer, who notes his company is up-front about what the loan costs to consumers.

Ryleigh Simms, a loan officer out of Manchester, said, "We do not loan to the poor and desperate. We loan to the working middle class. We loan to people who might live paycheck to paycheck, but who might need more help when something unexpected comes up. A broken car, an unexpected bill; these are all reasons people come to payday loan offices."

Fulmer noted that a payday loan is cheaper than bouncing a check at the bank and that the majority of residents in the state wants them.

A study conducted by Zogby International found 70 percent of residents in New Hampshire want to keep payday loans available.

Critics, however, point to another study conducted by the Center of Responsible Lending, which shows borrowers who receive five or more loans a year account for 90 percent of payday lenders' business.

The new law has also gained support from the state Attorney General's Office, the state banking commissioner, the New Hampshire Local Welfare Administrators Association and the New Hampshire Council of Churches.

Fulmer said payday lenders in the state want to work with the Legislature to create a bill that will work for everyone and not drive them out of the state.

They would like to see the new law be postponed until there is further study.

A bill before the House aims to create a study committee to look at access to consumer credit for people in the state.

The bill, SB 472, was already approved by the Senate.

Fulmer added if the state doesn't change the date, the jobs of 200 employees who work in the payday industry in the state are in jeopardy.

"All this does is invite offshore unregulated Internet lenders to come in," Fulmer said.

UCBeyond scholarship is back			2008/4/14
By JENN SPRACH
UCB, a global leader in the biopharmaceutical industry, has launched its second annual UCBeyond scholarship program. The company will award seven one-time scholarships of up to $5,000 Cdn to people diagnosed with Crohn’s disease for the 2008/2009 school year. They will also award seven one-time scholarships for people diagnosed with rheumatoid arthritis. “UCB is dedicated to creating unique programs and tools to aid patients in reaching above and beyond the boundaries of their disease and fulfilling their educational ambitions,” said Rob Hamilton, president of UCB Pharma Canada in a press release. The winners will be chosen based on two personal letters of recommendation and a one-page essay describing how they have overcome living with their disease. The judging panel is made up of leading physicians and patient representatives. The application deadline is June 30 and winners will be announced in September. Students who wish to apply for the scholarship can download an application form from www.ccfc.ca, www.arthritis.ca or www.cromecommunications.ca.