Consumers beware, foreclosure fraud is rampant in today’s post financial meltdown era. Unquestionably, the worst of the carnage left after the financial meltdown has been the millions of foreclosures that continue to plague the housing market. Although the number of foreclosures has dipped back under 1 million in 2011, it is expected to increase again in 2012, after a lull in processing caused by the “robo-signing” foreclosure fraud scandal at the hands of some of the major banks.
While many homeowners are willingly walking away from their homes and obligations, there are many more who try everything they possibly can to salvage the cornerstone of their “American Dream.” And, as you might expect, where there are people in distress and losing hope, there are always going to be opportunists and malicious scammers ready to swoop in and take advantage of them with foreclosure fraud.
As the situation worsened in 2009 and 2010, many distressed homeowners were heartened by the Obama administration’s proclamations that it would do everything it could to help people keep their homes. Although it did launch a couple of federally mandated loan modification programs, they were feeble attempts that barely made a dent in the number of people who needed to be rescued.
All it really did was provide a shield of legitimacy to the thousands of foreclosure fraud scams that had already begun to proliferate. People who couldn’t get relief through the government mandated program would desperately seek refuge in the arms of a supposed “rescuer,” who serendipitously appeared in a direct mail piece offering another way out. For many of these homeowners, their “relief” came in the form of one of several different schemes designed to liberate them from both their house and their money.
Foreclosure Fraud: The Bailout Offer
For someone desperate not to stay in their home, it seems like a reasonable solution. You sell your house to an “investor” who is willing to let you stay in the home, pay them rent and then, when your situation turns around, you can buy your home back. Unbeknownst to you, however, the investor never made any mortgage payments, for which you are still liable (he owns the title but your name remains on the loan).
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As if the creation of the Consumer Financial Protection Bureau, spawned from the Dodd-Frank financial reform law, wasn’t controversial enough, it is now under fire as a result of President Obama’s “recess” appointment of its new director, Richard Cordray. The quotation marks are there because the appointment is certain to come under legal challenges by Republican leaders who insist that they were not in recess.
We’ll let the courts sort that one out. The larger controversy lies in its ultimate impact on the public, as consumers and as citizens. While consumers may welcome many of its initiatives designed to protect and educate them, citizens are nervous over its unbridled powers, as it operates outside the scope of Congressional oversight.
The “independent” Consumer Financial Protection Bureau was created as part of the reforms mandated by the Dodd-Frank bill which, like its cousin – the health care reform law, was passed in the dark of night on a completely partisan vote without the opportunity for public debate. Its purpose is to broaden the scope of federal oversight of banking and non-banking institutions in their dealings with the public.
In what could only be construed as a tactic to prevent its future defunding by opponents of Dodd-Frank and the Consumer Financial Protection Bureau, the authors of the law established the CFPB as an independent body to be funded and overseen by the Federal Reserve. That means it lies outside the appropriations and oversight processes of Congress, meaning there is no “checks and balance” of its power or its purse.
Never mind that it is still being funded with taxpayer money as that is all that the Federal Reserve has to work with. So, the bottom line is that the Consumer Financial Protection Bureau is not accountable to Congress or the American people. With the dubious track record of the federal government and its swollen bureaucracies, how could that be a good thing?
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Car dealer scams, particularly financing, has become more prevalent in recent years. As if the car buying experience wasn’t bad enough, it has become a nightmare for many unwitting car buyers who, for one reason or 
another, aren’t able to use conventional means to finance their purchase. Along with the dozens of other scams that have proliferated in the wake of the financial crisis that has many consumers trapped by their deteriorating credit standings, there is no shortage of scams emerging in the car sales arena. The many different types of scams are too numerous to cover in this limited space, but we highlight the three most prevalent:
Car Dealer Scams: Buy Here, Pay Here Dealers
With conventional financing harder to come by for people with checkered credit histories, a whole new industry of buy here, pay here dealers has emerged targeting the very people who can least afford to get caught in their scheme. These dealers promote “drive-away financing” that doesn’t involve any third-party lending institution, rather it is strictly dealer financed. The terms are always atrocious and they only apply to used cars that would never make it on to a legitimate car dealer’s lot.
In addition to paying a high dealer markup, the car buyer is corralled into a high interest loan that often requires payments to be hand carried to the dealer each month. The dealers know that a third of the buyers will never be able to maintain the high payments and repossessions are a major part of their scheme because they can resell the very same car they sold months earlier.
Car Dealer Scams: Auto Loan Yo-Yo-ing
Car dealer scams happen more often than you would think, even among “legitimate” car dealers. Again, the target is usually those car buyers with less than good credit and who are vulnerable to too-good-to-be-true offers. It plays out like this: The finance person reviews your credit application and sees that you would not qualify for a low interest loan. But because the final terms of the purchase are not final until the loan is approved, he takes your down payment or trade-in and lets you drive off of the lot under the “temporary” terms of the low interest loan (Yo).
You then receive a call from the dealer that your loan wasn’t approved and, either the car has to be returned (Yo), or you agree to a loan with a higher interest rate. If you try to return the car, you are not likely to get your down payment or your trade-in back.
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Will the Unbanked Ever Become Bankable? With the rise of pre-paid debit cards, payday loans and pawn shops, we learn more about a large segment of the population that lurks in the shadows of the financial system in 
our country called the “unbanked.” These are people from a variety of backgrounds and for any number of reasons simply don’t show up on the radar of the banking system or they have been denied access to checking and savings accounts.
They somehow manage to conduct their financial transactions using alternative “financial services” such as check-cashing services and non-bank money orders in the banking underground. Who exactly are the unbanked and what, if anything, can be done to bring them into the banking mainstream?
Who are the Unbanked?
The unbanked population, which is estimated to number about 9 million households, falls into two primary categories: Those who fell out of the banking system, and have been denied access due to credit problems and/or past problems with check writing.
People who get on the wrong side of banks due to excessive overdrafts or unpaid negative balances are likely to wind up in the Chex Systems database which, like a credit-reporting agency, reports on consumer activities having to do with bank accounts. They can remain in the system for five years during which banks that use the system will likely refuse their business.
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The other night I had the occasion to watch the 2009 film, State of Play, starring Ben Affleck and Russell Crowe. Billed as a political thriller wrapped around government and corporate conspiracies, most of the attention is given to the intense and convoluted plotline that strings together seemingly unconnected murders, political ambition, government/corporate collusion and the threat of a takeover of the country’s domestic security by a private defense contractor.
Great stuff actually, but the central thesis of journalistic corruption at the hands of corporately-owned media was buried deep in the back story of the script. The film’s “who-done-it” storyline washed over the more revealing look into the state of a print media in decline and its effects on journalistic integrity. Amidst the many twists and turns of the unfolding murder mystery, laid the reality of a print media that threatens our very freedoms.
While the film does its best to sift out the villains and heroes from the storyline, it falls short in its illumination of the ultimate victim – the public good, for which the newspaper sacrifices at the expense of corporate profits. This poses the larger argument that corporate controlled media, under the pressure of profits and deadlines is subjugating the public trust in reliable journalism resulting in editorial decisions that are based on what the paper can sell versus what the public needs to know, in order to make informed judgments on the conduct of its government.
The net effect of this usurpation of media power is that the news organizations have become the arbiter of what constitutes “news” and what the public needs to know, threatening the very fabric of a democratic process it is sanctioned to protect.
Admittedly, it took a Hollywood produced movie to open my eyes to the significance of the issue; however, it wasn’t until two-thirds of the way through the film when it finally arose. The scene stood out starkly as it was the first time the editor confronted her top investigative reporter (Crowe) over his choice of news stories. She lambasted him for not submitting a tabloid story centering on the sex scandal involving a Congressman that had made the headline of a competing newspaper.
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There’s nothing more maddening than checking your credit card rewards balance only to learn that they have expired or are about to expire before you have a reasonable chance to use them. According to a study done by Synovate, a market research firm, only a quarter of eligible cardholders redeemed points in 2010.
That means three-quarters of cardholders could be running up against expiration dates for their points. While that was much more common in years past, before the proliferation of more competitive and lenient rewards programs, it still happens enough to where it is important to adopt a “use it or lose it” mentality if you are intent on accumulating rewards for purchases or travel.
The good news is that, due to the increased competition among credit card issuers, credit card rewards programs have become much more member-friendly, with more programs extending their expiration dates or eliminating them all together.
And, if you choose a cash back rewards program, you don’t need to worry about expiration because your account is credited directly with the cash. That leaves many of the travel rewards programs and a handful of reward points programs to be concerned with and have a plan in place to avoid losing your points.
Saving Your Travel Rewards
For those who choose to use travel rewards credit cards, the issue comes down to the redemption policies of the airline. Frequent fliers tend to have a better handle on this as they tend to use their miles more often. But even they can run into problems with blackout dates and seat availability.
And, if you accumulate miles with more than one program, it can get somewhat confusing in tracking your miles and the various expirations. If you’re focused on accumulating travel rewards, you really should look into one of the reward tracking programs such as gomiles.com or points.com which will aggregate your programs and help you manage them.
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You may be used to receiving credit card offers in the mail, but if you receive a letter from Union Workers Credit Services inviting you to join their membership plan, shred it immediately and warn your family and 
friends to do the same. When I received my own offer in the mail, I couldn’t believe that any company would be so bold as to think that people would fall for this type of junk. However, the more I thought about it, the angrier I became and I wasn’t able to just dismiss the issue.
Union Workers Credit Services is Not a Real Credit Card
This is not a real credit card offer, but rather a scam perpetrated by a company that claims you have been pre-approved for an exclusive Platinum Card Membership, and a guaranteed $10,000 credit limit with a low 5%APR.
The words “pre-approved,” “Platinum Card,” and “guaranteed $10,000 credit limit” in bold print jump out from the page, but upon closer inspection of the fine print, you will see that the firm is not affiliated with any bank. Furthermore, Union Workers Credit Services will tell you “not to be worried if you have previously been denied credit by Mastercard and Visa” because you qualify for their membership.
They mention the Mastercard and Visa brands, but you have to scan to the bottom of the letter and read the minuscule type to realize that they are in no way affiliated with either of these companies.
For just a $37.00 annual membership fee, your Platinum member status entitles you to supposedly deep discounts on name brand merchandise that you purchase through their catalogue. The website for Union Workers Credit Services states that they have a four-tier guarantee to assure customer satisfaction and that you can return the items within thirty days of purchase for a full refund. In addition to all of that, there are many other benefits and discounts that they will tell you about once you receive your membership package.
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Three out of ten American workers will suffer a disability, do you have a safety net? Face it, life happens, most often beyond your control, and it can sometimes produce some unexpected illnesses or injuries that can potentially disrupt your ability to keep your income flowing. In fact, the most valuable asset that most people have is their ability to earn an income. Yet for 82% of income earners, it’s the one asset that they haven’t protected.
There is a plethora of statistics on the number of working people who suffer job disrupting disabilities and they vary widely from source to source. On average, the statistics point to a chance of 3 out of 10 that a person who enters the workforce today will suffer a disability that will result in a loss of income before they turn 65.
Of those, one out of five will be disabled for at least a year, and one out of seven will be disabled for at least five years. The older you are, the higher your chances of incurring a disabling injury or sickness, which is all the more reason you shouldhave a safety net.
If you need more tangible evidence, consider this: Of the nearly one million foreclosures in the U.S. in 2010, half were a result of financial problems stemming from a disability. And, of the 1.5 million bankruptcies filed in the U.S. in 2010, nearly 60% were driven by medical issues. More to the point, of the nearly 3 million people who suffered catastrophic financial loss last year, 60% failed to protect their single largest asset.
Where’s the Safety Net?
When bad things happen to people, often the first place they look for help is the government for some sort of assistance. Unfortunately, in the case of an extended disability, the help is just not there. While there is a disability benefit available through Social Security, it is nearly impossible to qualify for it due to the extremely strict definition of disability. For seniors with an incapacitating disability, there’s some limited help from Medicare for covering nursing home costs.
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Do hybrid cars save money? Unquestionably, hybrid cars are a remarkable technology and no one can argue that they can’t save you money in fuel costs. But, the overriding question is whether or not they can save you money in the long run.
With everyone feeling the sting of higher gas prices, the idea of hybrid cars suddenly looks very enticing. But do hybrid cars save money? For the average person, it is important to do the math. If you are purchasing a 
hybrid purely from an economic standpoint, it may not payoff as well as you think.
The first consideration is the cost of the vehicles. Most hybrids are priced at a significant premium over fuel-based cars – as much as three or four thousand dollars difference. In fact, the average price range for hybrid cars is $20,000-$40,000.
Since most people will have to finance a good portion or all of the costs of the vehicle, you would be paying several hundred dollars more a year in financing costs which may simply offset the gas savings. While you would realize immediate savings from fuel costs, it may take as many as five to eight years to begin realizing any true savings. Of course, the higher the price of gas, the sooner you can realize net savings.
Another consideration when buying a hybrid is the cost of auto insurance. Insurance companies see hybrid cars as a bigger risk for several reasons. Why? Hybrid drivers tend to run up more miles on the odometer, which the insurer sees as an increased probability that the owner will be in an accident. Add to that equation the high costs to repair hybrid vehicles, and the lack of aftermarket parts inventory, and the end result is higher cost for the insurance companies and the owner.
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I have a confession to make. I’m a coupon clipper, but it hasn’t led to extreme couponing, yet. My friends and family know that I’m a proud coupon clipper, and because I’m not shy about sharing my shopping exploits, they know that I’m pretty good at it. Based on a typical family budget, I should be spending around $600 a month on groceries, including paper goods and personal hygiene products.
My average expenditure is about $400 which means I’m saving about 40% a month. I think that’s pretty good for a couple of hours work a month. So, I am an affirmed couponer, but by no means am I an extreme couponer, nor do I aspire to be one. The reality is that there is very little reality in extreme couponing, and I’m going to tell you why.
My Couponing Credentials:
I was couponing before couponing was cool. And, I learned enough about the ins and outs of power coupon clipping, coupon stacking, double coupons, store sale coordination, timing and organization that I could show anyone how to get up and running with a full-fledged coupon strategy that would generate at least 25% in savings on a monthly basis. And that doesn’t include the money I get back from purchasing groceries with my Capital One Rewards No Hassle Cash Credit Card .
So, when I see extreme couponing in action, such as the TLC reality show of the same name, I know that these people are in it for reasons beyond just saving some money, because the vast majority of normal people could never achieve that level of couponing. And, if they knew all that was required, they wouldn’t care to try.
Why Extreme Couponing Won’t Work for Most People
First, and foremost, extreme couponing, as portrayed in the TV show, is a full-time job. Well, it’s at least a 25 hour part-time work week when you consider all of the planning, organizing, hunting, and shopping required. So, anyone who does work for a living would not be able to engage.
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