Leadpile’s Blog

Payday loan providers know that this the big season is just around the corner for them and they are willing to put in a fight to make sure that no one interferes with that. Every state has their own rules and regulations when it comes to getting a payday loans. One thing that they all have in common is that they all have interest rate caps, all except for Wisconsin that is. Currently, “Wisconsin remains the only state in the nation that doesn’t regulate an industry that lends money for two weeks at a time, frequently extends balances for big fees, and winds up getting as much as 520 percent interest on its loans.”
Payday loans are meant to provide individuals with fast cash and it is expected to be paid back fast as well. They are not meant to be used time and time again, but rather as a one time quick fix. There only becomes an issue when the consumer takes out loan after loan that they know that they will not be able to pay back in a timely manner.
So would a interest cap rate hurt or help the payday loan industry of Wisconsin? In most cases it would probably stay neutral. Many lenders believe that it would create more bounced checks where in fact, if they were to just look at statistical data from other state lenders, they would see how there was not an increase in bounced checks.

OLA (Online Lenders Alliance) is an organization that has been around since 2005 representing the online lending industry. Leadpile is a proud sponsor at this year’s fall conference in Colorado Springs, CO. Attending and sponsoring such an event, allows us to be amongst others that are working on initiatives to help build the payday loan industry in a positive manner. This upcoming conference will be a great opportunity for Leadpile to meet with those that we are working with now, and those that we can potentially team up with in the near future. We look forward to meeting everyone at the conference!

Interest rates have gone down, and now many are wondering if it is really that time to refinance their home. The answer is YES. Not all situations are ideal to do a refinance, however there are things to look at with regards to entertaining the idea of refinancing your home right now.

According to ABC news, here are some common questions consumers might want to know before trying to refinance their home.

1. How much will a refinance cost?
2. Will a refinance save you money?
3. What kinds of loans are out there?
4. What are some common pitfalls?
5. What is the difference between a loan modification and a refinance?
6. If I have a prepayment penalty, should I still refinance?
7. If everyone wants to refinance, is the lending industry able to handle this rush?

Leadpile Lead Exchange generates a large volume of refinance (homeowner), loan modification, debt and home purchase leads. These are all consumers that are in this process of trying to determine what their best option is. No matter what the decision is, asking questions is key to knowing what is the best option for you and YOUR situation.

  In light of the bailouts going on with different industries, I had to point out a very funny YouTube video I found while reading over the paydaypundit. Our nation’s auto industry, banks and mortgage lenders are wanting to get money to help bail themselves out of a financial hardship they are going through. NOW Santa needs some help too!
Leadpile Lead Exchange would like to offer any help we can to Santa, but I don’t think Santa really needs any help with delivering Christmas gifts. If he is looking for some leads, we can certainly help him out with that! 

Enjoy and Happy Holidays!

Citigroup announced it is going to be helping some of it’s mortgage customers from going into foreclosure.  According to NPR News, Citi will be lowering mortgage payments on more than 100,000 people who have not yet fallen behind. They said they are looking at getting some sort of similar assistance to those people whose loan they service, but do not own. Other major lenders are also rolling out assistance programs to it’s customers to help try and help control more foreclosures from happening.  Some mortgage customers who are paying their mortgage on time, say what can Citi do for them for being a “good” paying customer?  This is a legitimate question, however at this point if Citi lets more people go in foreclosure, then this will hurt our home values and economy EVEN MORE!  We don’t want that.

My question is why did it take this long to roll something out like this? Shouldn’t this have been something the major lenders offered before we got to this point?  Some are still asking who is to blame for all this hardship in our economy and mortgage industry, however at this point it might be best to just get the economy headed in the right direction first. Wasting time on trying to place blame is something that Americans need to avoid, and instead focus on how we can get the economy headed in the right direction. Citi and these other mortgage companies, I do commend for helping to start getting the ball rolling!

Leadpile Lead Exchange comes across all sorts of consumers is all sorts of financial situations every day.  However, the number of people submitting requests for foreclosure, loan modification, debt consolidation are increasing dramatically.  These consumers need help and we are going to help in any way we can, just like Citi and these other mortgage companies are trying to do.  Everyone contributing to this resolution, will help us ALL get headed in the right direction.

Time is running out for consumers to read up on all the popositions being presented to them on the November 4th ballet. One thing that is being voted on in the states of Ohio and Arizona, is in regards to payday loans.  How much does everyone really understand about payday loans?  One myth I thought very important to point out:

Myth:  Payday lenders hide fees and mislead consumers.

Fact:  Just like any other service or loan you obtain, there is a cost to do get that loan or service.  In addition, any payday loan you take out there will be a cost to taking out the loan.  According to the CFSA website, “The cost of a payday advance is fully disclosed to customers on signs in the stores and in disclosure agreements. Moreover, in accordance with the Truth in Lending Act (TILA), the terms of the loan are clearly outlined in the lending agreement. Payday advances involve single, flat fees and there are no hidden charges, balloon payments or accruing interest. CFSA members also provide an educational brochure emphasizing responsible use of the product and offer a free right of rescission should the customer change their mind.”

CFSA also went on to say that in a recent survey 96% of the people were aware of the fees associated with taking out the payday loan.  Just like with any other loan, there are documents presented to the consumer with all the fees of doing the loan in black and white.  Are people sometimes just so anxious to get a loan, that they do not take the time to read the documents they are signing?

Leadpile Lead Exchange wants consumers to read everything before agreeing to take out a payday loan, or any other loan.  Knowledge is power!

The payday loan industry is getting a lot of attention, especially in the states of Ohio and Arizona. Those on the outside possibly do not fully understand the payday loan industry and there are some misconceptions about the short term loans.

Myth: Payday loan lenders do not want to be regulated.
FACT: According to CFSA, this is quit the contrary. Most payday lenders do want to be regulated and have certain industry guidelines. However, there are those that are trying to eliminate the industry as a whole, and not deal with keeping the “good guys” in business.
Currently, there are 37 states + the District of Columbia that have payday regulations. CFSA is working on trying to get regulations implemented on the remaining states, however they are not wanting to see the industry go extinct. Therefore, the question is… why is the payday loan industry going through such tough scrutiny, when in comparison with credit cards and other financial services there are similar costs/fees associated with them?
Leadpile Lead Exchange understands there are a lot of myths about payday loans, however the key is for those that are not fully educated on the industry, to read up to fully understand all aspects of this financial product compared to others. There is good to these types of loans, and they are sometimes very much needed.

We all hear the opinions on both sides regarding payday loans. I came across this scenario that really points out the similarities of taking out a short term payday loan and renting a car. According to Ohioans For Financial Freedom commercial (youtube video),

Renting a car can cost about $29.00 per day. But imagine if the government required the rental company to quote an annualized cost of $10,585!

It’s just like the government saying that a $100 emergency loan costs $391 for the entire year, when it only costs $15 for two weeks. If you only need the loan for two weeks.—the yearly rate is absurd.

Leadpile Lead Exchange deals a lot with payday loans, the consumers wanting them and the lenders wanting to provide the loan for them. This scenario I found really makes it a little bit easier to understand the comparison amongst payday loans to something like a credit card or a rental car. There is bad in everything if it is abused. There is a need for short term loans sometimes, and a payday loan is a reasonable loan to take out for that short term need.

In an effort to help distressed homeowners, Arizona attorney general Terry Goddard is asking mortgage lenders to set up streamlined modification plans for their mortgage customers. This is similar to what Countrywide recently rolled out to their mortgage customers. In addition to AZ, there are 9 other states such as California, Ohio, Illinois, and Texas. According to The Phoenix Business Journal, the lenders these states are approaching are Wells Fargo Home Mortgage, JPMorgan Chase, Morgan Stanley Home Loans, HSBC Finance Corp, Citigroup, and American Home Mortgage Servicing Inc.
I am not sure why all 50 states are not apart of this action, however it seems like a logical way to start putting a dent in what is going on with all the bad loans on the books. I hope we will hear more about this, because this might be one of those occasions where we WANT the government to get involved.

With all the regulations going on with different states, I thought this was an interesting article about the effects banning payday loans had on consumers in NC. According to The Community Financial Services Association (CFSA) website, banning payday loans in the state of NC is affecting consumers. The reality is that most that are trying to get rid of payday loans in these different states, have never needed a payday loan.
Understanding fully what payday loan consumers are going through, does not seem like a reality to those trying to ban them in the different states. Do those that are trying to ban the payday loans understand what taking them away is going to do? Do they understand that some credit cards are a much more expensive option for the consumers? What are some other options available to consumers in place of a short term payday loan? Are they prepared to offer these other alternatives to the consumers, to help them get out of this temporary situation?
In the state of NC, there seems to be some effects with the fact that payday loans were banned there. According to this CFSA article, “In fact, respondents’ answers to the survey clearly show that the elimination of payday loans in North Carolina did nothing about the demand and forced consumers to replace payday loans with costly, less desirable and even dangerous options.” Overall, states with either pending regulations or those states trying to regulate, should maybe look at the overall picture of the payday loan industry. Some don’t CHOOSE to get a payday loan… they might have no other option. Leadpile Lead Exchange understands their are consumers needing a loan to fix a temporary financial situation, and we have the lenders/buyers available to provide that much needed loan to the consumers.

How many of you read the fine print at the bottom of your credit card or loan applications? I know I don’t always do that, and I am learning that maybe we ALL need to pay closer attention to the fine print of agreements we sign. The reason we want to make sure and do this is with a practice called “universal default”. According to Bankrate.com, if you are late to ANYONE (lenders) you have the potential of having your interest rate adjust really high, potentially affecting your payment amounts, and maybe even affect your credit. Bankrate states that the complaints about this happening is increasing because more and more customers are feeling the affects of it. In years past some credit card companies and lenders would not implement this practice. However, with tougher times affecting all businesses, they are resorting to “old” practices such as universal default.
An example of this would be if you had a debt owed to creditor A, and you fell 30 days late on it. Creditor A could call up creditor B to inform them that you fell behind on their debt. Because of what creditor A said, creditor B (who you are currently paying on time) could increase the interest rate you are being charged. This is legal because of the tiny print in your creditor agreement where it talks about universal default. Basically it gives the creditors a right to adjust the interest rate on any of your creditors if you are 30 days or more late on another one. In years past this provision was in loan agreements, but not always enforced.
Word to the wise….. read all the fine print and ask lots of questions before doing any new loans or debts.
Leadile Lead Exchange can help those customers that maybe get in the situation where they get behind on their accounts, because of situations like this.

The paydaypundit.com has an interesting blog post regarding payday loans. Some articles on the internet are talking about payday loans related to predatory lending and college students. This blog made a good point about students not being able to get a payday loan. A payday loan is based on a “payday”, and the only way a person can get a payday loan is to have that loan linked to a “pay day”. How can a student get this type of loan if they do not work, like many other students?
Predatory lending is very much something that can be controlled by the consumer, if they ask a lot of questions and make sure they know what they are doing. Students or not students, payday loans are something many people need, and lenders will not give a loan to someone if they do not have a “pay day”. Leadpile Lead Exchange wants to work with students needing loans, and also payday lenders wanting payday leads. Unfortunately, the two will probably not be a match.