DebtBytes News
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Happy Holidays
This is probably the last newsletter for 2007 so let me wish you a happy holiday time ahead and a Happy New Year for 2008.
I managed to find a couple of last minute projects that should be of interest moving forward. In my research project regarding credit offers I started I Buy Junk Mail and I started the Ethical Banker site to have an open discussion about banking ethics.
The Ethical Banker site is a solicitation of opinions and discussion about what ethical banking is these days. Several bankers are participating in the discussions and it has been enlightening.
On the junk mail front, there is no shortage of credit offers falling into the mailboxes of consumers following the subprime mortgage meltdown. This research project has been very interesting and I do have to commend creditors for actually doing a good job of explaining the terms and conditions. Now, if we can just get people to read them.
Steve Rhode
President of Myvesta Foundation
A Global Social Enterprise
Member Agencies
Myvesta US | Myvesta UK
Myvesta Ireland | Myvesta Netherlands
Myvesta Australia | Myvesta South Africa
Web: http://myvestafoundation.org
LinkedIn: http://www.linkedin.com/in/steverhode
Donate an Idea. Change a Life - http://businessideaoftheday.org
Sincerely,
Steve Rhode
President
Myvesta Foundation
A Global Social Enterprise
Today's Top Stories:
China Goes on Credit Diet
China plans to intensify their control over credit for the upcoming year. With worries of fiscal difficulties and inflation woes the government is prepared to tighten macro controls. With the economy being expected to grow 11.5 percent in 2007 and another 10 percent in 2008, regulators want to keep inflation under control by constricting the rules on credit management.
Under Pressure
The UK's CAB (Citizens Advice Bureau) has recently raised concerns over the careless selling of loans. Evidently, some banks are targeting and coercing clients who are already in debt to take out new loans or demanding that they pay back what they owe. The CAB is trying to get regulators to step in and protect the pestering of people who are already in debt.
Reverse Mortgages Reverse Trust
There's good and bad news for the 62 and over year olds of America. I'll start with the good; over 12.5 million citizens over the age of 65 own their homes outright and no longer owe any money towards their mortgages. Another plus point would be that of reverse mortgages, which, when used responsibly, can help aid seniors to live more comfortably. However (here comes the down side), the popularity of reverse mortgages have skyrocketed in the past couple of years. There's no real sign of slowing down any time soon, especially since the Senate removed the limit as to how many reverse mortgages can be offered. This meaning that with more and more people wanting reverse mortgages and with more and more people being able to get a reverse mortgages, that leaves room for some dodgy deals to arise from lenders who see seniors as easy targets and may not put their best interest first. Just a word to the wise to keep a keen eye on what you're agreeing to.
Sometimes a Payday Loan Can Pay Off
Georgia and North Carolina continue their stint of being two of the most indebted states in America. The States originally tried to conquer the dilemma a few years back by banning payday advance loans. However, while these types of loans have been banned since 2004 in Georgia, it still remains to have the most bounced checks in households, complaints about lenders and debt collectors, along with having a very high rate of those filing for Chapter 7 bankruptcy. Similar is the outcome of its neighboring state of North Carolina, who has banned payday loans since 2001. With the lack of payday loan supply the demand for increased credit grew, thus pushing people further into financial difficulties and damaging their credit report. As with any type of credit or loan, payday loans can be helpful and sometimes the best option, when used correctly.
New Zealand's takes a NAP
These past two weeks have been the first for New Zealand's new debt assistance regime: the No Asset Procedure (NAP). People who qualify for the NAP are those, first of all, with no assets (did the title give it away?), without a history of a previous NAP or bankruptcy, less than $40k debt (excluding student loans and fines) and having no means whatsoever to pay the debt back. It may looks like a Chapter 7 bankruptcy in the United States; however the NAP avoids bankruptcy and provides a fresh start for citizens. So far, 88 NAPs have been put forward only 11 rejected for the simple reasons that, "one person had some assets, three owed more than $40,000, five had some ability to repay their debts, and two had taken on debt knowing they couldn't pay it back".
Woman With Debt Free History Looses Home
The touching story of Sherri Winston, a recent pre-foreclosure property owner. Sherri was comfortably living her life, paying her bills and financing her family, her ongoing medical bills and prescription fees. Remarkably, after having all of this on her plate, she was not even one penny in debt. Until (there's always an "until" or "however" with happy stories isn't there?) her mortgage lenders realized they had underestimated her escrow. Her mortgage payments shot up and she found it hard to make ends meet. After getting in contact with the lender time and time again explaining she could not pay what they were now asking she was given to options: pay it or we'll foreclose on your house. It wasn't until Sherri moved out of the property and into a new place of residence that the mortgage company shed some kind of help: 'why did you do that…we can help you…there's ways around this'. Sherri states, "whether or not I'll be able to sell the house, broker a deal or plummet into full-blown foreclosure, only time will tell".
All I Want for Christmas is Debt
"It seems all everyone wants for Christmas is more stuff, and more stuff means more debt. But as Australians increasingly turn to the plastic solution, economists are wondering, where will it end?"
Hey Big Spenders....
Residents of Ireland are now borrowing one and half time their disposable income; which ties Ireland and Britain for the sixth position in terms of consumer borrowing when mirrored against disposable income. It also has become apparent that Ireland ranks as the heaviest borrowed in the eurozone. But wait, there's more....it has also been brought to attention that Irish people are the third-highest spenders on plastic with only Americans and South Koreans spending more.
American Banks Profiting on Mexican Poor
In a gleaming office tower in Mexico City secured with retinal scanners, bulletproof glass, and armed guards, dozens of workers in white lab coats dart around a large operations center monitoring long rows of computers. Along one wall, 54 enormous screens flicker dizzyingly with numbers, graphs, and fever charts: a relentless stream of data. You'd think the urgent mission involved tracking the trajectory of a spacecraft or the workings of a national power grid, not tiny amounts of cash and credit for Mexico's working poor.
A Simple Explanation Why the Credit Crunch is a Concern for Consumers
So much has been in the news in the US and UK lately about the Credit Crunch and how the subprime mortgage crisis is to blame for banks financial problems. Here is why the news leaves me worrying about consumers.