Archive for the ‘Auto Title Loans’ Category

Payday Loans and Auto Title Loans Trap Unsuspecting Veterans

Tiemeyer White, a 33-year-old Navy veteran in Beaumont, Texas, is still haunted by the auto title loan he took out more than a year ago.

In November 2013, the father and full-time electrical engineering student at Lamar University saw his truck repossessed.

Like payday loan shops, lenders that offer quick cash through short-term, high-rate notes secured by a vehicle title mainly serve borrowers who have few alternatives. Some target veterans in particular.

Its the worst experience of my life, White says. After six and a half years in the Navy, during wartime and everything, this situation just makes my teeth grit.

An auto title loan typically carries an annual percentage rate of 300% and has a very short term, such as 30 days, in whichit must be repaid. It differs from another type of short-term, high-rate debt called a payday loan because the borrower signs over the title of his or her vehicle to secure the debt. Payday lenders usually get a postdated check or other form of access to the borrowers bank account, but no other collateral. Car title loans are allowed in 21 states, while 29 states have no substantive restrictions on payday loans, according to the Center for Responsible Lending in Durham, North Carolina.

President Barack Obamas administration has proposed new regulations to better protect service members on active duty from costly payday and auto title loans. The new rules would close some of the loopholes in the 2006 Military Lending Act, which was designed to protect soldiers and sailors from predatory lenders and caps annual percentage rates, or APRs, at 36% for a range financial products. But veterans remain vulnerable.

In military communities, where many vets live, this is a big problem. More than four out of five ZIP codes 82% that have a veterans facility also have one or more payday or auto title lenders as well, according to Texas Appleseed, a nonprofit organization that advocates for social and economic justice for Texans. It says almost half of the areas have five or more of these operations, while about three-quarters of Texas ZIP codes have none.

Thats definitely a concerning trend, says Ann Baddour, a senior policy analyst at Texas Appleseed. Its also something that indicates we need to do more to ensure our veterans have access to safe, fair financial products that help them build their lives, or rebuild their lives in some cases.

Its not uncommon for veterans to find themselves in need of financial help. About 1.4 million veterans are at risk of homelessness because of poverty or a lack of support networks in their communities, according to the National Coalition for Homeless Veterans.

But turning to a payday or auto title lender to bridge an income gap can make things even more complicated. The federal Consumer Financial Protection Bureau says short-term, high-rate loans can become debt traps that can snare the unwary. They carry APRs ranging from 391% to 521%, while car title loans average 300% APR, according to the lending center, which advocates for a nationwide cap of 36%. It says many borrowers using title loans cant keep up with the costly payments and typically roll them over, or extend them, eight times.

White says his vehicle title loan quickly got out of hand. When the U.S. government shut down because of a budget impasse in October 2013, he didnt get his Post-9/11 benefits or work-study pay for a Department of Veterans Affairs job for almost two months. He fell behind on bills. The title lender began calling him several times a day both at work and on his cellphone, asking for loan payments.

I tell them, I understand youre doing your job, but I also understand that your job you make your living off of making my life worse, White says. Thats how I felt that moment.

Two weeks later, a tow truck hooked up his 2003 Dodge Ram SLT pickup in his schools parking lot, and he watched as it was hauled away. Later, he saw the truck for sale online. While the Servicemember Civil Relief Act bars the repossession of an active-duty service members property without a court order, that doesnt extend to veterans. White says the loan payments and loss of his truck drained his bank account and made it difficult to focus on schoolwork.

I know one thing, I will never ever get another title loan. That will never happen, he says.

Some short-term lenders are working to change the status quo. At the Community Financial Services Association of America, a trade association of more than 40 payday lenders, members follow all federal and state regulations as well as a set of best practices, says Amy Cantu, a spokeswoman.

There is a clear distinction between good actors and bad actors in the payday industry, she says. Members of her group dont lend to active-duty military personnel, but it does make loans to veterans.

Association members are required to offer extended payment plans at no extra charge to help borrowers avoid getting into a cycle of debt, Cantu says. They also limit loan rollovers to four, to keep borrowers from letting costs grow out of control. Before seeking a loan, check the lenders Better Business Bureau rating and see if its licensed in your state, she advises.

Car title loans also provide a source of short-term credit for those with few options, according to Todd Zywicki of George Mason University in Fairfax, Virginia. But he says prices and conditions should be clear and advertising shouldn’t be deceptive. The Military Lending Acts restrictions lead some service members to turn to more costly alternatives because the law doesnt lessen their financial needs, Zywicki says. In his view, capping short-term loan rates will only reduce consumer choice.

“We should not be assuming the people who use these products are morons,” Zywicki says. Rather than legislating away what few options they have, “we should think about giving people more choices,” he says.

Retired military personnel who served over 20 years or were medically discharged often can get help from aid organizations tied to their service branch. For instance, the Army Emergency Relief program gives grants and no-interest loans to those who can document a financial need. The group has provided about $600 million to soldiers and veterans since 9/11.

Because organizations like these have limited resources, they cant provide assistance to veterans who served for a shorter amount of time, like White. They can refer them to other source of aid, though. The nonprofit USA Cares, for example, offers fast financial help to veterans in need, responding within 48 hours of receiving a request.

Before getting a payday or auto title loan, Baddour says, veterans should look for lower-cost options.

Reduce the Length of Your Auto Loan

Reduce the Length of Your Auto Loan

There are some things you want to run long.

I like two-week vacations so I can have time to wind down. A week is just not enough.

If you’re an investor, the best thing going is that you have a long time to let your money work for you.

But the one thing you don’t want to be too long is your auto loan.

An increasing percentage of car buyers are opting to stretch their monthly car payments far longer than the traditional four-year loan. Edmunds.com noted that in October, the average new car loan was 67 months, making it the second highest average term on record. Similarly, Experian Automotive found that the average auto loan was 66 months during the first half of this year.

Nearly a quarter of vehicle loans made in the second quarter were 73 months to 84 months, according to Experian. Another 41 percent of loans had 61 months to 72 months financing terms.

“Longer-term loans continue to dominate the market,” wrote Melinda Zabritski, senior director of Experian Automotive in an analysis of the automotive finance market.

Two things are colliding when it comes to car purchases, says Edmunds senior analyst Jessica Caldwell. The longer loans allow people to purchase more expensive vehicles. And the sticker shock is less because buyers are focusing on the monthly payment rather than the overall cost of the car.

Let’s look at the numbers. In early October, the average price of a new midsize car was $25,731, according to Edmunds. The average interest rate was 4.4 percent. Over 48 months, you would pay $2,399.38 in interest if you financed the total price, not including sales tax, title and registration fees. Stretch the loan out to 60 months and it will cost you $3,008.38 in interest. At 72 months, you’ll pay $3,625.77.

Here’s what I’ve noticed when people sign on for long auto loans:

• They get into an accident. If you don’t make a good-size down payment, the longer the loan, the more likely you’ll be upside down, meaning you owe more than the car is worth. I’ve counseled a number of people who have had their cars totaled as a result of an accident. But they’re still left with a balance on their loan because the insurance settlement only covered the current market value of the car.

• They can’t sell their car. I was helping a couple in a situation in which the husband lost his job. They couldn’t afford two car payments. However, both of their vehicles were underwater. They had no savings. So they were faced with finding some way to come up with several thousand dollars to add to what they could get for the car they wanted to sell to satisfy their loan. Or they had to keep making monthly payments they couldn’t afford, or let the lender repossess the car. They chose the latter, which ruined their credit and got them a deficiency judgment. Even though the car was sold, they still owed the balance due on the loan after the vehicle was purchased at auction plus the costs associated with the repossession.

• They get bored. I’ve talked to people who got tired of a car and wanted a new vehicle, just because. There wasn’t anything wrong with the car. They just wanted something new. They traded in their old car, but there was a difference in what they owed and what the dealer was willing to pay. So, making an even dumber move, they rolled the balance of the old loan into a new auto loan, which meant they were immediately upside down with their new car too.

Here’s my rule of thumb when it comes to auto loans. If you can’t afford the monthly payment under the traditional 48-month financing, you can’t afford the vehicle.

Don’t drive away your wealth by hitching yourself to a long auto loan.

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Lexidy Offers Car Title Loans, Pink Slip Loans and Auto Title Loans

Lexidy Title Loans is a local San Diego company and has money to lend! Demand can be high for their services and they work on a first come first serve basis.

SAN DIEGO, CALIFORNIA, July 6, 2013 /EINPresswire.com/ — Lexidy Title Loans, located in San Diego offers fast loans to consumers based on the value of their vehicle. Lexidy has created an easy to understand lending service that is often confusing and overwhelming to borrowers. Their simple terms and competitive rates allow customers to get an auto title loan and fix their short term cash issues.
Lexidy Title Loans is a local San Diego company and has money to lend! Demand can often be high for their services and they work on a first come first serve basis. They offer clients car title loans also known as auto title loans and pink slip loans. And the best part is, unlike auto pawns, their clients can keep driving their vehicle while also having the cash from their loan.
While many lending companies in the industry will evaluate a person’s credit report, job history, and financial history, Lexidy is different because they strictly focus on the value of the car. Lexidy does not run personal credit reports or verify employment. This “no hassle” approach makes life easier for customers and is why Lexidy is recognized as a top company in the industry.
Lexidy Title Loans understands that every client’s situation is unique and works with their San Diego clients on an individual basis to meet their lending needs. Lexidy works hard to make their process quick, simple and easy to understand. Lexidy Title Loans does not strive to be the biggest car title loan in San Diego they strive to be the best.
More information about Lexidy Title Loans can be found by visiting their website at www.lexidytitleloans.com.

Holly Fuerstenau
Lexidy
8584807620
email us here

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EZCORP Shares Rebounding (EZPW) On Analyst Upgrade

On Monday pawn and payday lender EZCORP Inc (EZPW) said that it expected to fall short of its third-quarter profit forecast,  citing falling gold prices and sending shares down 8%.

Gold prices have  plunged  to a three-year low, nearly 4% as the stock market continued to rally as the appeal to own gold as a hedge against economic uncertainty  continues to wane.

Today, EZCorp shares are rebounding, up nearly 8%  to $18.72 after Sterne Agee analyst Henry J. Coffey Jr. upgraded the rating on EZCORP (EZPW)  from Neutral to Buy, and raised the price target from $18.00 to $23.00.

In the report, Sterne Agee noted, “We are upgrading EZPW from NEUTRAL to BUY and raising our price target from $18 to $23

The stock has traded in a range from $17.77 to $18.85  on moderately high volume today.

EZCorp, Inc. (EZPW) is a provider of instant cash solutions. The Company provides a range of instant cash solutions, including collateralized, non-recourse loans, commonly known as pawn loans, and a range of short-term consumer loans, including single-payment and multiple-payment unsecured loans and single-payment and multiple-payment auto title loans

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Wisconsin Supreme Court Will Hear Cell Phone Tracking Case, Among Others

June 25, 2013 – The Wisconsin Supreme Court has agreed to decide whether police can track a suspect’s whereabouts through court-ordered cell phone location data.

Milwaukee police obtained video surveillance of a man purchasing a cell phone just before firing fatal gunshots in June 2009. Police obtained the number of the phone purchased by the suspect and, with a court order, retrieved data and information from the cell phone service provider to track the phone’s physical location.

Using that information, police tracked suspect Bobby Tate to his mother’s apartment. Tate’s mother consented to a search of the apartment, where they found Tate sleeping.

His clothes matched the description of clothes worn by the suspect in the video footage, and his blood-stained shoes contained the DNA of shooting victims at the scene. Police arrested Tate, who later pleaded no contest to first-degree reckless homicide.

Tate had filed a motion to suppress evidence obtained as a result of the court-ordered tracking of his cell phone, raising a Fourth Amendment issue. The Fourth Amendment to the US Constitution protects individuals from unreasonable searches and seizures.

The circuit court denied the motion, and a state appeals court affirmed in State v. Tate. Tate argues that obtaining location data to find his location is protectable “search,” and there is no statutory authority to support the order issued by the judge.

The state argues that under recent GPS tracking precedent, no statutory authority is needed for a judge to order that a cell phone provider must provide location data.

Interestingly, Montana recently became the first state to enact legislation requiring that police obtain a warrant before tracking an individual based on cell phone information.

Court Accepts Three Other Cases 

The state supreme court also added three other cases to its docket, and denied review in 58 cases, including 20 from Milwaukee County.

In UW System Board of Regents v. Decker, the court will examine whether the UW System Board of Regents is eligible “to obtain a harassment injunction against a former UW-Stevens Point student who has been lawfully banned from system property yet repeatedly trespasses and engages in a pattern of harassing and intimidating conduct.”

In Greer v. Schwarz, the case may resolve “whether the state’s Department of Corrections can pursue revocation proceedings against an individual for an action committed after he received an erroneously issued discharge certificate.”

And in Wisconsin Title Auto Loans v. Jones, the court may decide whether an arbitration clause in a consumer contract is unconscionable despite the US Supreme Court’s decision in ATamp; T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011).

In Concepcion, the nation’s high court ruled (5-4) that the federal Arbitration Act preempts state laws that bar class action waivers in consumer contracts as unconscionable. Prior to Concepcion, Wisconsin barred such arbitration clauses.

This case is before the Wisconsin Supreme Court for the second time. Previously, the court ruled that the arbitration clause used by Wisconsin Auto Title Loans was unenforceable because it was unconscionable. That was pre-Concepcion.

Summaries derived from full summaries posted at www.wicourts.gov.

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Trading Financial Credit Now Offers Cash in 1-Hour on Car Title Loan

Los Angeles, CA (PRWEB) June 26, 2013

Now a borrower can get cash in an hour from the well-known provider of collateral loan services, Trading Financial Credit. Trading Financial Credit has been providing car title loans in California, Arizona and New Mexico for over two decades. Incorporated in 1994, this company is a member of Better Business Bureau and pursuant to Department of Corporations. Trading Financial Credit holds the California Lenders License and Arizona Sales Finance License.

A senior executive working with the company said, “We have assisted countless people to get through their urgent financial obligations. In order to provide the best possible services we now assist with the provision of cash in just one hour. Anyone can meet their short-term financial needs through our secured loans that are guaranteed by a vehicle’s equity.”

Trading Financial Credit provides a significant portion of the value of their vehicle to borrowers who qualify for car collateral loans. The borrower retains the physical possession of the vehicle and can use it throughout the loan period. Only in the event that the borrower is unable to pay back the loan, Trading Financial Credit is entitled to the car’s title to secure its loan.

“The loan can be paid back in easy installments. Our loan terms are flexible. The loan duration is usually between 1-3 years. A borrower can pay back without any pre-payment penalties. Even a bad credit qualifies for receiving our car title loan. We give loans even if someone has been denied credit elsewhere or is facing bankruptcy,” added the senior executive.

Trading Financial Credit accepts online applications. The required documents include the vehicle title, a valid drivers’ license, car registration and insurance coverage. Also needed are a copy of the borrower’s recent pay check, utility and phone bills and six references. Trading Financial Credit can be approached for auto title loans in Hayward details of which can be read here, car title loans in Fresno CA which are explained here and auto equity loans about which one can learn more here.

About Trading Financial Credit, LLC:

Trading Financial Credit is a well-known Los Angeles based company providing car title loan and auto title loan service for nearly 20 years. Trading Financial Credit has helped countless individuals and families get back on their feet with auto title loans in California, Arizona and New Mexico, including auto title loans in Phoenix details of which are available here.

Contact Information:

Address:

Trading Financial Credit, LLC

3055 Wilshire Blvd, Ste 300

Los Angeles, CA 90010

Phone:

1-800-737-0900

Website: https://www.tfciloan.com/

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High Cost of Living Pushes Many L.A. Residents to Get Car Title Loans

Los Angeles, California (PRWEB) June 12, 2013

It is no secret that the cost of living in Los Angeles is high, and when looking at the most current US Census Bureau’s Cost of Living Index from 2010, residents start to understand exactly how high. Factoring in expenses like grocery items, utilities, transportation, health care, miscellaneous goods and housing, the average cost living in LA is 36.4% higher than the national average. Housing alone stands 107.1% higher than the rest of the United States. Los Angeles Car Title Loans notes that LA residents increasingly apply for car title loans to help make ends meet when the cost of living is so extreme.

The recession took a huge bite out of Californian’s finances, and even those who had extra saved up in preparation for the unexpected are running out of funds. Some people cannot afford their bills, and after racking up debt and bad credit over the past few years, they are now suffering the consequences. Hundreds live paycheck to paycheck and do not have extra saved up to pay for unexpected expenses, like urgent medical bills or a flight to visit an ailing family member.

Car title loans, often referred to as auto title loans or pink slip loans, are a viable option that a growing number of Californians seek out to help afford unplanned expenses. By using a car to secure a loan, lenders offer borrowers a large sum of money in exchange for a car title. Borrowers get to keep driving their car while paying off the loan– another huge perk.

Because the amount of the loan is based solely upon vehicle value, the borrower’s credit history usually does not come into play. Also, eliminating the credit check process speeds up the approval time. Borrowers can apply and receive their money all in the same day. Los Angeles residents who need to pay for an immediate emergency expense can seek solace in Los Angeles Car Title Loans as an increasingly popular loan option.

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EZCorp Thrived During Recession But What Does The Future Hold

Recessions are usually bad news for business. Earnings fall as consumer spending withdraws and so too share prices. But there are some companies that do well in times of recession. One such company is EZCorp (EZPW). This stock came on my radar as it currently trades at a PE ratio of just 6.9 and earns a nice 13% on capital invested. Its debt is covered by assets on the balance sheet. It would have made a great recession investment, but how will it do in the future?

The business

EZCorp provides a variety of instant cash solutions, including collateralized, non-recourse loans, commonly known as pawn loans, and a variety of short-term consumer loans, including single-payment and multiple-payment unsecured loans and single-payment and multiple-payment auto title loans. In Texas, it provides fee-based credit services to consumers seeking loans. At its pawn and buy/sell stores, it sells merchandise, primarily collateral forfeited from pawn lending operations and second-hand merchandise purchased from customers. It also offers prepaid debit card services to help customers better manage their money and control their spending. It relies heavily on gold as collateral for loans which is one reason for the depressed share price. But for me this isnt a real concern, at least for solvency. Gold prices can be hedged and given the short-term nature of pawn loans, its exposure to gold isnt huge. Its not hard to see why this company has done well during the recession. When people struggle financially they are more likely to need short term loans to cover bills. If they have a bad credit rating (which most people struggling financially do) then they are forced to the likes of pawn brokers and payday lenders. From pre crisis levels, the share price of EZCorp tripled in a few short years, before falling back. This is the kind of investment I wish Id made at the time, but at least I know what to look for now during the next recession.

Long term prospects

So while EZCorp are currently very profitable, long term we wouldnt expect (or hope) the recession to continue and sooner or later economic growth will resume. So how will EZCorp do when (if?) this happens? To assess this I looked at its financials before 2007 and compared them with the present day. I also looked at its per store earnings to get an idea of what earnings may look like if economic conditions return to those seen in the pre 2007 period.

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State files lawsuit against Texarkana pawn shop due to interest rates

A consumer-protection lawsuit has been filed against a Texarkana pawn shop accused of charging excessive interest rates on title loans in violation of Arkansas law.

Attorney General Dustin McDaniel’s lawsuit alleges that Tri-State Pawn of Texarkana, Inc., assessed illegally high interest rates on auto-title loans made in Arkansas. An auto-title loan, known as a title pawn, is a short-term, high-interest loan in which the borrower provides the lender with the title and a key to his or her vehicle as collateral for the loan, but the borrower retains possession of the vehicle.

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On Victory Drive, Soldiers Defeated by Debt

On Victory Drive, Soldiers Defeated by Debt

by Paul Kiel, ProPublica, and Mitchell Hartman, Marketplace, May 15, 2013, 5:50 amby Paul Kiel and Krista Kjellman Schmidt, ProPublica, May 15

This story was co-produced with Marketplace. Listen to their coverage.

Seven years after Congress banned payday-loan companies from charging exorbitant interest rates to service members, many of the nations military bases are surrounded by storefront lenders who charge high annual percentage rates, sometimes exceeding 400 percent.

The Military Lending Act sought to protect service members and their families from predatory loans. But in practice, the law has defined the types of covered loans so narrowly that its been all too easy for lenders to circumvent it.

We have to revisit this, said Sen. Dick Durbin, D-Ill., who chairs the defense appropriations subcommittee and is the Senates second-ranking Democrat. If were serious about protecting military families from exploitation, this law has to be a lot tighter.

Members of the military can lose their security clearances for falling into debt. As a result, experts say, service members often avoid taking financial problems to their superior officers and instead resort to high-cost loans they dont fully understand.

The Department of Defense, which defines which loans the Military Lending Act covers, has begun a process to review the law, said Marcus Beauregard, chief of the Pentagons state liaison office.

The act mainly targets two products: payday loans, usually two-week loans with annual percentage rates often above 400 percent, and auto-title loans, typically one-month loans with rates above 100 percent and secured by the borrowers vehicle. The law caps all covered loans at a 36 percent annual rate.

That limit did do a great deal of good on the products that it covered, Holly Petraeus, the Consumer Financial Protection Bureaus head of service member affairs, said in an interview. But there are a lot of products that it doesnt cover.

Representatives from payday and other high-cost lenders said they follow the law. Some defended the proliferation of new products as helpful to consumers.

A 400 Percent Loan

In June 2011, when Levon Tyler, a 37-year-old staff sergeant in the Marines, walked into Smart Choice Title Loans in Columbia, SC, it was the first time hed ever gone to such a place, he said. But his bills were mounting. He needed cash right away.

Smart Choice agreed to lend him $1,600. In return, Tyler handed over the title to his 1998 Ford SUV and a copy of his keys. Tyler recalled the saleswoman telling him hed probably be able to pay off the loan in a year. He said he did not scrutinize the contract he signed that day.

If he had, Tyler would have seen that in exchange for that $1,600, hed agreed to pay a total of $17,228 over two and a half years. The loans annual percentage rate, which includes interest and fees, was 400 percent.

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