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http://repofinder.com - http://www.chinookobserver.com/news/local/foreclosures-hang-over-pacific-county/article_c4a84218-4462-11e0-980b-001cc4c03286.html#user-comment-area

2011-03-02T09:40:00.002-07:00

Foreclosures hang over Pacific County
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DAMIAN MULINIX/Chinook Observer
More than a dozen potential buyers were on hand Friday night in Ocean Park for a real estate auction of a foreclosed property.

. Posted: Tuesday, March 1, 2011 4:18 pm

Foreclosures hang over Pacific County By CATE GABLE
Observer correspondent ChinookObserver.com | 0 comments

PACIFIC COUNTY — The phrase “in the aftermath of the housing crisis” is prevalent in the national news, but in Pacific County the number of new foreclosures continues to rise.

In 2009, trustee sales, the classic sale of property on the courthouse steps, hit 116. In 2010, the number rose to 127. And the number of trustee sales for 2011 appear to be heading up to the same levels: between the first of January and Feb. 25, there were already 19 trustee sales in county records.

When asked about whether county real estate sales have turned an economic corner, Wayne O’Dell, owner and broker of Anchor Realty, said, “We’re bouncing along the bottom right now.”

The increasing number of foreclosures was also confirmed by Neal Mackeever, financial counselor with the Community Housing Resource Center in Vancouver, a non-profit that provides loan modification counseling and other services.

“Foreclosures were at their highest levels in 2010 and 2011 will be worse,” Mackeever said. “We are still getting 20 to 30 people in our offices every week.”

How to lose your home

There are many ways to lose your home or property in the labyrinthine financial services industry, and these sales options go by a variety of names: short sale, foreclosure, real estate owned or REO sale, repo (short for repossession) or trustee sales. Each has a different set of legal steps and happens at different times in the transfer of property ownership after a problem arises. But, basically, a foreclosure is the result of a default of payment by a borrower to a lender.

In fact, the story is so complex that Long Beach lawyer James B. “Jim” Finlay, the soft-spoken gentleman whose name often appears on the notice of trustee sales documents recorded and archived on the Pacific County auditor’s site, was reluctant to speak on the record about the process. “I’m not willing to be quoted by someone who does not understand the process,” he said by phone.

Finlay suggested taking a seminar to understand the difference between a mortgage, which is not much used anymore, versus a deed of trust to secure a loan. He also mentioned that a foreclosure for failure to pay property taxes is different than a loan foreclosure. “It’s one of those things that if you don’t understand the whole process, I don’t know how I can talk to you.”

The computer told me, “Sell your home”

What Finlay makes clear, and many homeowners have discovered, is that nothing is simple when you are trying to stay in your home after stumbling to keep up with either property taxes or loan payments, or both. You need expert and often expensive legal advice, and many of the remedies offered by financial institutions are only promises. It can seem that everyone except the homeowner holds the knowledge and power.

Larkin Stentz, owner and manager of Green Angel Gardens, has been caught in a refinancing merry-go-round for months.

“Another result of the economic downturn is the potential for my loss of Green Angel Gardens, the only organic certified farm on the Peninsula,” said Stentz.

“I’ve been working to restructure the loan and also working with an advisory group to keep the farm as a citizen-owned community resource.”

“When you hear about Wall Street executives getting $150,000 in cash bonuses and then homeowners struggling to refinance…” Stentz trails off, unable to find the right words.

The frustration in his voice is clear as he describes his documents being lost time and again, having to retell his story over and over as he speaks to a revolving door of different people at Bank of America. Stentz even relates that he received a FedEx package from them with the request to send in a series of documents — which he did — but even these documents became “lost.” Another time, he faxed a set of 17 pages to a specific person at a specific fax number and they all “disappeared” and had to be re-sent.

At one point Stentz said that one of the myriad financial representatives he spoke with said simply, “The computer told me that you should sell your home.”

Living nightmare

Sam Mundell, who was once a professional in the real estate market in Southern California, tells a similar story about his home in Long Beach.

“I’ve been through a living nightmare. We moved here five years ago and then my wife got breast cancer and we lost everything but this house. At one point I had $150 in my pocket.”

Mundell has a story so similar to Stentz’s that it is eerie. “Every time I called Bank of America, I talked to a different person. And I’ve had every answer under the sun… ‘You’ve been approved,’ ‘You haven’t been approved,’ ‘Your loan documents are on the way,’ ‘No, we haven’t seen any loan documents for you,’ ‘You’re not eligible,’ and then finally ‘The holder of your note does not participate in refinancing.’”

When Mundell asked who was the holder of his note, he was told it was Fannie Mae. “We’ve given them millions of dollars — and I just read today that they’re asking for more money. I’ve been at this for one and three-quarters years,” Mundell said. “Finally, I went in to talk to someone in person at the Bank of America in Astoria and was given the extension of Andrew Burns. The last time I called his number I was told this extension was not available.”

Other home or property owners are less willing to talk about these painful situations in detail, except to say, “The process is a nightmare,” “I’m bruised but not broken,” and “We finally just gave up.”

Chaos rules

Holly Beller, associate broker in the Long Beach ReMax office, confirms, from a slightly different point of view, the horror stories relayed by unfortunate property owners.

Beller is a specialist in what the real estate world calls “REO” sales or real estate owned sales, which means that the bank has taken possession of a property and is attempting to re-sell it. Generally, the bank is represented by a third party, which specializes in the legal aspects of this type of sale. The third party could be a lawyer or a firm that handles home auctions, like Williams and Williams, a firm that recently conducted an auction at 24208 Birch Place in Ocean Park.

These REO sales can be found by scanning the Multiple Listing (MLS) services and are generally indicated on the real estate information sheet. REO auction firms also list upcoming sales. Both O’Dell and Beller have waded into this sales market and confirm that the process can be lengthy and frustrating for both sellers and buyers.

“Sometimes you are working with an owner on a short sale and, at the same financial institution, there is another whole department that is also trying to foreclose on the property,” said O’Dell. Beller concurs, “Sometimes you can be close to closing a short sale when the foreclosure takes place.”

Beller indicates that she has been involved in 20 to 30 REO sales in the last year.

“The best deals can usually be had after a short sale falls through. A REO sale is maybe 75 percent of the value of a property,” she continued. Usually by the time a property becomes a REO sale, the lender expects to get a lesser value for the property than may have been owed on it.

Short sales

A short sale is a different animal altogether, although some of the players are the same. Basically, for a short sale an owner attempts to sell a property in order to pay the lender and recoup as much as possible on the value of the home.

“Short sales can take six months or more,” said O’Dell, who has been certified with the National Association of Realtors to handle short sales. The process is complicated by the fact that the current lender is brought into the negotiations and must approve the new potential buyer of a property. If the sale does not cover enough of the current debt, the negotiations can break down.

Remember, too, that because short sales and foreclosures are handled by different departments within the same institution, quite literally the left hand does not know what the right hand is doing. While the short sale process continues, often a foreclosure unit is working to take the property out of the hands of the homeowner.

“As soon as a homeowner stops making payments, the foreclosure process can begin. Your bank notifies you and puts a notice in the newspaper,” O’Dell said.

There could be different lenders involved in a short sale as well. The primary lender, in “first position,” has the right to be paid first; but if a line of credit was taken out by the homeowner, these lenders with liens in “second position” also have a claim on the property.

One basic difference in these types of default sales is who is actually the owner of record for the property. In a REO sale, the ownership has already reverted to the lender.

Great misfortune and great opportunities

“There are definitely great opportunities out there,” said Beller. “But you need to have either cash in hand or confirmation of your revenue source.”

In any case, one family’s misfortune can be another’s good deal. “Most property defaults are the result of maybe a divorce, or a medical emergency,” said O’Dell. “When we work in the short sale market, we try to set a price that is acceptable to the bank. I’m generally working with the client that is having the problem.”

“We’re seeing an uptick on demand in sales for second homes,” said O’Dell. “There are people who have savings in money market funds and they say, ‘We’re only getting one percent on our money, that’s just not enough interest. If I bought a property, I could at least get some pleasure out of it as a second home.’”

“Or some people are buying an intended retirement home for down the road,” he said.

Mackeever has some advice for folks struggling to keep their homes. “We’ve found that there are two important things on the list that make a difference,” he said. “Number one — be organized. Number two — work with a certified counselor.”

http://repofinder.com - http://www.ivpressonline.com/news/ivp-news-repo-business-is-steady-20110222,0,6913576.story

2011-02-22T11:29:00.002-07:00

Repo business is steady

Armando Real Jr. talks about car repossessions Friday at his office, Asset 24/7 Recovery, in Calexico. Real said most repossession are done in the evening. (JOSELITO VILLERO)

Share 0diggsdiggBy SILVIO J. PANTA

Imperial Valley Press

12:55 a.m. PST, February 22, 2011
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One area of the economy that appears to have weathered the effects of high unemployment and other economic ills in the Imperial Valley has been the vehicle recovery business.

Some might even say, given the circumstances, business is thriving.

To hear James Tucker tell it, the repossession business continues unabated by the sluggish economic recovery.

In fact, the Imperial Valley’s lackluster economy has had little effect on Tucker’s Imperial-based Piranha Collections business, he said.

“It just stays pretty much steady,” said Tucker, who has been in the vehicle recovery field for about 10 years.

“The economy has affected us little,” he said.

The types of vehicles that get repossessed when an owner can no longer afford to keep them vary, Tucker said.

Those who’ve been turning in their prized cars or other vehicles include people who received loans they weren’t qualified for and lost their homes through foreclosure, Tucker said.

Armando Real, operator of Asset 24/7 Recovery in Calexico, would add state employees to the mix of people who’ve fallen on hard times, especially since their wages have been cut through unpaid work furloughs and layoffs.

Not even those who work in law enforcement are immune from having their vehicles recovered, Real said, suggesting that the financial shortfall others are experiencing is giving his business a boost at a time of economic uncertainty.

“We’re just repo-ing people now who wouldn’t be in financial stress,” Real said.

The number of repossessed vehicles has undoubtedly soared in the almost three years with many of the people voluntarily turning in their vehicles that they can no longer afford, Real said.

“Ever since the recession hit, it has definitely gone up significantly,” Real said.

Boats, large sport utility vehicles, race motorcycles and jet skis make up the bulk of the vehicular “toys” some residents reluctantly have been forced to part with, Real said, following 2008’s national downturn.

“We get a little bit of everything,” Real said. “Mostly toys are what people are giving up these days.”

But Michael Heyd, president of the California Association of Licensed Repossessors, said that in general high recovery rates at this time would be unusual considering how many banks and lending institutions have clamped down on who qualifies for the loans to buy expensive vehicles.

As lending institutions are lending a lot less there is not “an influx” of people who are giving up their vehicles out of the necessity to go to their jobs, Heyd said.

“They’re trying their best to keep what they have,” Heyd said. “I have seen a lower spate of repossessions in the last couple of years. We’re just working harder to get more repos for the banks.”

Yet despite the difficulties the repossession business faces elsewhere, people here in the Imperial Valley are finding it tough to keep what they have regardless of what they do for a living, Real said.

“Now, no one is immune,” he said. “It’s just bad all around.”

http://repofinder.com - http://money.cnn.com/2011/02/01/news/companies/repo_spike_mtv/

2011-02-01T14:28:00.000-07:00

Repo men: The new face of reality TV
By Aaron Smith, staff writerFebruary 1, 2011: 1:14 PM ET

NEW YORK (CNNMoney) -- The producers of "Jersey Shore" are launching a reality show about a topic that's attuned to tough times: repossessed cars.

Spike TV, which is part of MTV, is about to begin production of "Repo Games," a quiz show hosted by repo men and starring hapless car owners who fall behind on their payments, according to MTV spokesman David Schwarz.

0Email Print But all is not lost. On this show, they'll have one last chance to save their cars. The dispossessed owner can earn their cars back, fully paid, if they correctly answer three out of five trivia questions.

"They're fun questions, seemingly easy questions, the stuff that the majority of people can answer," he said. "We're not trying to stump people with impossible questions."

For example, they might have to identify state capitals, said Schwarz. But if they don't get three questions right, it's off to the impound yard.

"It's a show with real stakes involved," he said.

Sneak peek at Super Bowl ads
The show brings to mind "Repo Man," the cult comedy flick from the 1980s starring Emilio Estevez as a suburban punk who gets recruited into the often-hazardous job of repossessing cars.

But unlike the movie, "Repo Games" is actually hosted by real repo men who snatch cars for a living, not actors, said Schwarz.

The show won't just be about people who are too broke to make their car payments, he said. It will involve a cross-section of cars and people, including rich owners with luxury cars who space out on making payments.

"People who have had their car repossessed range from Paris Hilton to your average Joe," he said.

Schwarz said the show is currently in production and will air this spring.

http://www.repofinder.com - http://www.bakersfield.com/news/local/x864760413/Wholesale-car-auction-coming-to-Bakersfield

2011-01-20T09:35:00.000-07:00

Wholesale car auction coming to Bakersfield
BY JOHN COX, Californian staff writer

Felix Adamo / The Californian
The vehicles are starting to arrive for Jim Pennington's auction next week. Pennington operates out of a parking lot next to the old Meadows Field terminal. It won't sell to the general public, but a wholesale vehicle auction opening for business Wednesday at Meadows Field is expected to offer savings to car dealers and credit unions that now pay to transport used vehicles for sale outside the county.

Founded by third-generation auctioneer Jim Pennington, Western Sierra Marketing, or WSM, is the only car auction of its kind in Bakersfield. As such, the company has won the support of local businesses that buy or sell used vehicles.

"If he can make it work, I think it'll be a good thing for everybody," said Dan Hay, president and general manager of Jim Burke Ford.

Similarly, the senior vice president of lending and credit at Bakersfield-based Kern Schools Federal Credit Union, Rudy Tafoya, said transportation comprises a significant portion of a credit union's cost of dealing with repossessed vehicles.

"Any vehicle that doesn't have to be transported, if you will, to another area ... is a savings," he said.

Used vehicles make up a vital part of Bakersfield's auto sales industry. Buyers often show up to a new car lot with an older car for trade. If the transaction goes through, the dealer decides whether to recondition the used vehicle and keep it for possible resale, or immediately ship it off to auction.

While two large companies dominate U.S. auto auctions, Pennington said that smaller independents are able to compete on customer service.

But first they have to establish relationships with dealers, which is why last summer the former owner of Western Stockman's Market began meeting with car dealers as far away as the high desert, the coast and around the Central Valley.

"I kept hearing the same thing: 'If you build it, we'll come,'" Pennington said.

Linking up with two business partners, fellow auctioneer Norman Haight and auto broker Larry Champagne, Pennington leased parking space at Meadows Field's William Thomas Terminal. The first auction there is set for Wednesday, when Pennington hopes to sell 100 to 200 vehicles at a rate of one a minute.

The auction is set to take place once every two weeks, then possibly go weekly.

Only people with state-issued auto dealer licenses may participate. WSM plans to charge buyers and sellers a fee based on the price of the vehicle sold.

McClure's Monthly Motors, in Bakersfield, spends as much as $125 to have a car delivered for sale to Fresno -- more than that if the auction is in Los Angeles, owner Brian McClure said. But if WSM succeeds, he added, he can drive the vehicle to Meadows Field himself.

McClure said WSM's success will depend on how many cars the company attracts for its auctions and how many buyers show up to bid.

"I've got my fingers crossed that they're going to be successful," he said.

http://www.repofinder.com

2011-01-04T10:14:00.000-07:00

http://www.tennessean.com/article/20110104/BUSINESS01/101040329/2047/NEWS01

Auto lenders approve more subprime borrowers
By G. Chambers Williams III • THE TENNESSEAN • January 4, 2011

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Twitter FarkIt Type Size A A A Next Page1| 2Previous PageAs the auto industry continues to make a slow recovery from tough times of the past two years, lenders are finally loosening credit restrictions and approving car loans for customers with less than prime credit ratings.

In the third quarter last year, for instance, the share of new vehicle loans to "credit-challenged" consumers rose 12.7 percent compared with the same period in 2009, said Experian, one of the nation's major credit reporting agencies.
Loans to borrowers with subprime credit scores as low as 550 were among categories that grew the most.
The shift comes just as new car sales are picking up momentum. While the official tally for U.S. automobile sales in 2010 won't be out until this afternoon, analysts say full-year deliveries probably rebounded to about 11.5 million vehicles from 10.4 million in 2009, bolstering industry confidence in consumers' willingness to buy despite economic uncertainties.
"Right now, what we're seeing is growth in auto lending across the board," said Jeremy Anwyl, CEO of the auto research Web site, Edmunds.com. "There is a lot of money sitting out there and very few ways for investors to put it to work. What those investors are realizing is that there is money to be made in subprime auto lending."
For Middle Tennessee car dealers, the easier credit has helped boost sales.
Credit restrictions were the biggest reason people stopped buying new cars during the recession, but "that's not a problem anymore," said Marty Horn, sales manager at Nashville's Crown Ford.
"We're not having any trouble finding financing for anyone with a score in the 600s," he said. "We can get most people financed through Ford Credit, and if that's not available, we have other lenders ready to step in."
Terms are getting back to normal, as well as loan-to-value ratios, basically how much money a lender will advance on a vehicle compared with its book value.
"We're seeing loans of up to 140 percent of value from some lenders, and Capital One is by far our best lender for the subprime customer, which is below a 620 score," said Michael Creque, general manager of Alexander Chevrolet-Cadillac in Murfreesboro.

Next Page1| 2Previous PageAs the auto industry continues to make a slow recovery from tough times of the past two years, lenders are finally loosening credit restrictions and approving car loans for customers with less than prime credit ratings.

In the third quarter last year, for instance, the share of new vehicle loans to "credit-challenged" consumers rose 12.7 percent compared with the same period in 2009, said Experian, one of the nation's major credit reporting agencies.
Loans to borrowers with subprime credit scores as low as 550 were among categories that grew the most.
The shift comes just as new car sales are picking up momentum. While the official tally for U.S. automobile sales in 2010 won't be out until this afternoon, analysts say full-year deliveries probably rebounded to about 11.5 million vehicles from 10.4 million in 2009, bolstering industry confidence in consumers' willingness to buy despite economic uncertainties.
"Right now, what we're seeing is growth in auto lending across the board," said Jeremy Anwyl, CEO of the auto research Web site, Edmunds.com. "There is a lot of money sitting out there and very few ways for investors to put it to work. What those investors are realizing is that there is money to be made in subprime auto lending."
For Middle Tennessee car dealers, the easier credit has helped boost sales.
Credit restrictions were the biggest reason people stopped buying new cars during the recession, but "that's not a problem anymore," said Marty Horn, sales manager at Nashville's Crown Ford.
"We're not having any trouble finding financing for anyone with a score in the 600s," he said. "We can get most people financed through Ford Credit, and if that's not available, we have other lenders ready to step in."
Terms are getting back to normal, as well as loan-to-value ratios, basically how much money a lender will advance on a vehicle compared with its book value.
"We're seeing loans of up to 140 percent of value from some lenders, and Capital One is by far our best lender for the subprime customer, which is below a 620 score," said Michael Creque, general manager of Alexander Chevrolet-Cadillac in Murfreesboro.

(2 of 2)

GM eases standards
General Motors' dealers are making use of Ally Financial, the now independent lender that used to be GMAC, as well as GM Financial, the new GM-owned subprime lender formerly known as AmeriCredit. GM bought that company in July to provide its dealers with more lending options for non-prime customers.

"Ally will take anything from 620 up, but we even got a customer with a 587 score approved last month with Ally," Creque said.
Two factors are helping rebuild confidence in non-prime and subprime lending among investors: higher used-car values, which help lower the risk if a vehicle has to be repossessed; and lower default rates among borrowers, the dealers and credit experts said.
Auto-loan delinquencies dropped significantly during the third quarter, Experian said, with 30-day defaults down 8.4 percent from the same quarter in 2009, and 60-day late payments down 17.4 percent.
In addition, the total amount of auto loans considered at risk for default dropped by $6.4 billion during the quarter.
"With delinquencies down and less money in their portfolios 'at risk,' lenders can be a little less conservative in their lending strategies," said Melinda Zabritski, director of automotive credit for Experian.
Buyers start to return
Buyers are coming back, and they're starting to realize that credit "isn't anywhere near as tight as it was 18 months ago," said Ben Freeland, president of the Freeland Chevrolet Superstore at Hickory Hollow. "It's not crazy like it was at the peak, but we can get financing for people with scores anywhere in the 600s, and can even go into the upper 500s with the right conditions — decent employment and a good down-payment."
Freeland said lenders haven't thrown the spigots too wide open, though, and he doesn't see a risk of delinquencies spiking higher.
"They are doing more due diligence than they did before, looking for more documentation, such as pay stubs," he said.
The loosening of auto-lending standards remains a "sort of slow, tentative, step-by-step improvement," Edmunds.com's Anwyl said.
Lenders are looking more closely at debt-to-income ratios, and car payments generally must be where lenders feel comfortable — at no more than 20 percent of an applicant's income.

http://www.repofinder.com

2010-12-25T19:14:00.002-07:00

http://www.lvrj.com/business/businesses-adapt-to-survive-112448239.html

SOUTHERN NEVADA ECONOMY: Businesses adapt to survive

Recession forces some to rethink their approach

By JENNIFER ROBISON
LAS VEGAS REVIEW-JOURNAL
Debra Solt, director of work force development for Vegas PBS, left, poses with Ronna Timpa in the lobby of the Vegas PBS building. Timpa has worked with Vegas PBS to take her English as a Second Language training program to the Internet.
CRAIG L. MORAN/LAS VEGAS REVIEW-JOURNAL

Nevada's recession has proven tough on just about everybody.

From workers who have seen their pay slashed to businesses that have lost half or more of their sales, few people -- save bankruptcy attorneys and repo men -- have seen their fortunes improve in the past three years.

But not everyone has folded under the pressure.

Legions of local professionals adapted to the slump, accepting a reality that has pushed them into new lines of business.

Here, we share three stories of survival, each offering their own lessons on flexibility in the face of hard times.

a remodeled business plan

For nearly three decades, building luxury houses provided great business for Christopher Homes.

The Las Vegas company built more than 1,600 local homes from 1981 to 2008, specializing in high-end properties on golf courses and in upscale master plans.

Then the recession arrived, and as for the city's housing market, well, you know the rest.

"About a year ago, we really analyzed the market and tried to come up with our best estimate of what the market would look like over the next few years," said Chris Stuhmer, Christopher's owner and chief executive officer. "We saw that the amount of business in the future, and the market complexities that are contributing to lower real estate values, were going to create a very difficult environment for us to create and produce houses on a profitable basis."

So Christopher turned from building new homes to remodeling existing ones. Today, home remodels comprise roughly 90 percent of the business Christopher conducts. That's a major change for a company that made 100 percent of its sales on new homes before the recession.

It's not just the revenue source that's changed. Clients have completely different expectations when remodeling.

"In a successful remodeling job, it's much more about the experience than the finished product," Stuhmer said. "We have focused a lot of our attention on managing that experience. We inconvenience homeowners as little as possible."

Since it officially launched its remodeling business in March, Christopher has remodeled kitchens, added bedrooms and built second floors onto single-story homes. Contracts are averaging about $90,000 in cost, though Christopher has handled renovations ranging from $20,000 to $800,000. The company should have 50 to 60 jobs in its renovation portfolio by March; about 25 percent of its business comes from homeowners who live in houses built by Christopher.

The new direction has helped the company stay in business, but Christopher's annual sales remain roughly 80 percent below where they were before the recession, Stuhmer estimated. It's also down to 16 or 17 employees, compared with more than 100 workers at its peak. But Stuhmer said he holds out hope for the long-term future, saying there's a good chance the company could get back to building the 100 or so homes a year it developed before the downturn.

"The market isn't going to stay the way it is now forever," Stuhmer said. "The question is how long it takes to come back. We'll need significant improvement in the local and national economies, as well as some job growth, before any material changes happen in our local market."

driving growth in a recession

Dale Amos bought local payday-lending outfit Star Loan Centers in December 2007, just as the nation's recession was getting started.

It might seem like a fortuitous investment, given the greater need for cash advances that typically comes with a slumping economy. But like practically any business in Southern Nevada's especially deep downturn, Star Loan Centers needed a boost along about late 2008.

That's because collecting on payday loans became particularly difficult in the recession. If a borrower skips out on his obligation, a lender can get a court order to garnish the borrower's wages, but that's possible only if the consumer has a job -- an increasingly scarce proposition in a state that leads the nation in unemployment.

Plus, the legal wrangling can take months or years. The business must take the borrower to small-claims court and win a decision. That can take six months or more; Star's portfolio contains cases that are well over two years old.

With auto titles, on the other hand, there's no court action required to collect on a loan, and when someone does default, the repossession process can conclude in as little as a week.

So Amos, Star Loan's owner and president, decided in November 2008 to add car-title loans to the company's services.

"I just happened to be a car guy. I knew about cars," Amos said of the business decision. "I looked at our loss ratio on payday loans, and I looked at the drawn-out collection extravaganza. For the most part, people are not going to lose their vehicles. If they go on unemployment, we'll work out a payment arrangement. People do what they can to avoid losing their cars."

Today, car-title loans make up 70 percent of Star Loan Centers' portfolio. That success on the auto side has enabled the company to be more selective about the payday loans it makes, Amos said.

"There's just a huge demand of people needing money. We over-scrutinize now," he said. "We can pick and choose our business at this point."

Title loans have also allowed Star Loan Centers to grow in the downturn. The company's portfolio has expanded 300 percent since March, Amos said, and it's negotiating a lease on a second location to complement its original outpost on Sahara Avenue.

On top of that potential second office, Star Loan isn't done evolving. Amos said he's in talks with possible partners to open a sales lot to turn around cars his company has repossessed. He'd offer on-site financing as well.

"We'll be able to handle both sides of the business," he said.

bringing training back

You'd think speaking the language of your company's customers is a necessity.

The recession has taught Ronna Timpa otherwise.

Timpa is founder and president of Workplace ESL Solutions, an 18-year-old Las Vegas business that teaches basic English and Spanish to workers in sectors ranging from government to hospitality. In the depths of the recession, many companies slashed their training budgets after determining that it was a luxury to teach employees English as a second language at the workplace.

"They told me, 'If we're laying off workers, we can't have ESL training," she said.

So Timpa watched as the downturn stole roughly 50 percent of her annual sales.

Her business-saving epiphany came at a May trade show. As she addressed a crowd at a New Mexico convention of the National Association of Workforce Development Professionals, an attendee from Florida jumped up and down in the back of the room, telling her that his work force-investment board needed her educational program, but couldn't afford it on-site. Instead, he could put her materials on the Internet for her, and she could train online at a much lower cost.

"I'd had offers for years to put everything online, so I was like, 'Yeah, yeah, yeah,' " Timpa recalled. "The next thing I knew, he sent me a sample chapter."

The draft helped Timpa see the possibilities. She could customize online training for any business, and she could even reach displaced workers.

"Now, we can reach international customers who've been contacting me for years, and we can make them their own curriculum in a heartbeat. We could reach thousands of people at a fraction of the cost," she said.

Timpa has teamed up with Vegas PBS, which has a work force-training division, to develop her classes. She's transforming her textbook, "Hotel English," into an online version, and Vegas PBS will provide closed-circuit video capabilities for instructors to help guide students through the Internet material. Once the final product rolls out in the spring, a hotel operator will be able to stream interactive-video lessons into multiple properties, and combine them with Internet lessons.

But it's consumers who will benefit the most from the new training initiative, Timpa said.

"We can reach so many people with this. Customized training (online) doesn't replace face-to-face learning, but it gets everyone excited about speaking English to their customers," she said. "And the more people you have trained in (English as a second language), the more you'll have people talking with your customers and giving exceptional service."

http://www.globe-democrat.com/news/2010/dec/20/bbb-study-shows-some-used-car-dealers-taking-advan/

2010-12-20T16:19:00.001-07:00

Bbb Study Shows Some Used Car Dealers Taking Advantage Of Buyers
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Monday, December 20, 2010

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CloseComment.St. Louis, Mo., Dec. 20, 2010 – A Better Business Bureau (BBB) study of the used car industry in eastern Missouri and Southern Illinois finds that some dealers are taking advantage of buyers with poor credit by selling cheap vehicles that don’t last 30 days. In some cases, the vehicles barely got out of dealers’ lots before they broke down.

More than 13,000 complaints against used car dealers were filed with the BBB last year, making it the seventh most-complained-about industry in the region. The study, based on complaints to the BBB and a BBB survey, focused on companies that sell only used cars, excluding franchised auto dealers.

Michelle L. Corey, BBB president and CEO, said that many of the problems with the used car market result from failures on the parts of dealers, consumers and consumer advocates.

“Consumer advocates have failed to adequately educate the public about the safeguards that need to be taken when buying used cars,” Corey said. “Many customers have failed to educate themselves about the laws governing used car purchases or have neglected to get an independent inspection of the cars they purchase. And a few dealers prey on consumers by selling cars that they know are defective.

“This study is not critical of all retailers who sell used cars, and should not be interpreted that way. This study does show, however, that there is room for improvement.”

A Florissant woman said she bought a 1997 Ford Expedition from A & E Auto Sales in East St. Louis, Ill. The car seemed to be operating well on the test drive, so she paid $800 down and agreed to pay $150 every two weeks to the dealer to meet the remainder of the $3,000 purchase price. The car began making noises before she arrived home. The dealer did a tune-up, charging her $25 for parts, but the car still was making noise when she left the dealership.

The dealer told her it was an exhaust problem, but that the business didn’t work on exhaust systems. She took the car to a muffler shop, where she was told the car needed $2,000 to $3,000 in repairs. Unable to pay for the repairs, she parked the car behind her house. A&E Auto Sales later repossessed the car.

A former St. Louisan said she bought a 1999 Ford Contour from Ken’s American Motors, also in East St. Louis. Although the car was sold without a warranty, she said she assumed it was mechanically sound and paid $900 down and agreed to pay $206 a month for two years to pay off the $4,000 price of the car.

She began experiencing problems with the car almost immediately, including several breakdowns on highways. Ken’s tried to fix it several times, but when she took it to another repair shop, she was told that the engine was damaged and that the car had failed safety and emissions tests. Ken’s took possession of the car, and she thought they would repair it, but nothing was done and the car was repossessed.

Consumers related their problems to the BBB during the study and in complaints. They told the BBB that they believe some dealers are ignoring federal and state laws designed to protect the consumer or are skirting those laws. The study found that some dealers fail to display Buyer’s Guides required by the Federal Trade Commission (FTC). The guides display warranty information, such as the length of the warranty and any parts covered by the warranty.

When BBB staff members shopped six used car dealers in Missouri and Illinois, they found one dealer that displayed only two Buyer’s Guides on the approximately 20 cars for sale. Another dealer displayed guides on about half of the cars on his lot.

Forty two percent of the consumers who answered a BBB survey said that advertising was their primary reason for choosing a used car dealer. Location was the primary factor for 36 percent. The BBB examined websites for 46 used car dealers and found that 37 percent of them made questionable advertising claims as defined by the BBB’s Code of Advertising or federal and state laws.

The BBB’s study recommends:

That agencies responsible for enforcing laws on consumer protection and the sale of used cars be more vigorous in their enforcement of those laws.

That the consumer protection agencies, trade associations and others, including the BBB, step up efforts to educate the public, particularly those of less means, regarding their rights in buying used cars.

That the same agencies also increase efforts to inform sellers of used cars of their obligations under the various laws involved in selling used cars.

That the Missouri Legislature consider tightening the statutes to require that used car dealers provide at their expense completed emissions testing certificates, as is now required regarding safety inspections.

That consumers read contracts and the Buyer’s Guide before making a purchase. Consumers should have verbal promises about the vehicle’s condition or promised repair in writing. An independent diagnostic inspection is also recommended.

That regulation or legislation be considered by the appropriate Missouri authorities to prohibit dealers who sell only used cars from performing safety or emissions inspections on a used vehicle sold by the same dealer.

The study listed 11 companies that have received the most complaints at the BBB in the past three years and which have a rating of D or F. They are, in order of the number of complaints received:

•Ken’s American Motors, 3001 Camp Jackson Rd., East St. Louis, Ill. – 126 (F)

•Car Credit City, 12750 St. Charles Rock Rd., Bridgeton, Mo. – 64 (D)

•Insta Credit Auto Mart, 1690 Magnolia Dr., O’Fallon, Mo.; 910 N. Bluff Rd., Collinsville, Ill., and 1807 W. Highway 50, O’Fallon, Ill. – 52 (F)

•A & E Auto Sales, 3338 Camp Jackson Rd., East St. Louis, Ill. – 50 (F)

•St. Louis Car Credit, (a/k/a Preowned Auto Sales), 2111 and 2766 Gravois Ave., St. Louis, Mo. – 43 (F)

•Auto Centers of St. Louis, 1350 N. Lindbergh Blvd., Florissant, Mo. – 41 (D)

•Auto Buy Credit, 10250 W. Florissant Ave., and 4101 Chippewa St., St. Louis, Mo. - 31 (F)

•Auto Depot LLC, 10059 St. Charles Rock Rd., St. Ann, Mo. - 30 (F)

•Auto Credit Mart LLC, 8440 St. Charles Rock Rd., St. Louis, Mo. – 28 (D)

•Paylater Auto Sales, 2916 Camp Jackson Rd., East St. Louis, Ill. – 28 (F)

•Cahokia Motors Inc., 2600 Camp Jackson Rd., Cahokia, Ill. - 23 (F)

The BBB advises that consumers in the market for a used car should:

Check the Buyer’s Guide - usually posted in the window - for any warranty information. Do not rely on verbal promises not specified in the guide.

Before buying a car, take it to a mechanic for an independent inspection.

Insist that the dealer provide you with a copy of the Buyer’s Guide, as required by law.

If you buy a car “as is,” there is no guarantee that it won’t be useless the next day.

If you buy a car in Missouri, do NOT sign a “junk” or salvage affidavit. If you do, you forfeit your right to have the dealer pay for a safety inspection and pay for repairs if the car fails emissions testing.

A safety inspection does not guarantee that the car is reliable.

The Used Car Study can be downloaded or read online at: http://cms-admin.bbb.org/Storage/142/Documents/Used%20Car%20Study%202010.pdf

Consumers can learn how to protect themselves or find reviews of businesses or charities by calling (314) 645-3300 or by going online to www.bbb.org.

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http://www.wnep.com/news/countybycounty/wnep-lacka-scr-theft-kevin-prasi,0,7771735.story

2010-12-15T20:13:00.002-07:00

Man Charged With Stealing Thousands From Employer

A man in Lackawanna County is accused of ripping off more than $300,000 from his employer.

Investigators said he did this to feed his gambling problem.

Kevin Prasi, 28, of Clark's Summit handled the finances at Vullo motors in Scranton. Prasi told investigators, he had a serious gambling addiction.

Investigators said he stole more than $300,000 from his former employer.

Prasi worked at Vullo motors in Scranton, as the finance manager.

Investigators said he stole the money by selling vehicles and not reporting the sales to the dealership. He pocketed nearly $80,000 doing that.

Prasi would also take out fake loans, and keep that money for himself, which was another $80,000.

"On cars that were sold from Vullo motors, that were repossessed, he would then resell them, and then not use the proceeds to pay the loan off, he would keep that money for himself," said District Attorney Jennifer McCambridge of Lackawanna County.

Investigators said Prasi did this for almost a year, until Vullo owners confronted him about it.

In court papers Prasi admitted to stealing the money and said it was his gambling illness that led him to do it.

He even worked out a deal to try to pay all the money back.

He began paying $300 a week until last month. He stopped because he didn't have a job, and he said he couldn't afford the payments. To date, Prasi has only paid back about $5,000.

Owners said Prasi worked for them for several years, they treated him like family, and this is all too disappointing.

"You never want to think that this could happen to a business, surely in this economy it's affected their bottom line, and ultimately I think that's what led them to the discovery is the numbers just weren't adding up," said District Attorney McCambridge.

Prasi is charged with seven counts of theft, and seven counts of receiving stolen property.

He is out on bail.

http://www.wanganuichronicle.co.nz/local/news/car-buyers-loss-proves-harsh-lesson/3933775/

2010-12-13T13:23:00.001-07:00

Car buyer's loss proves harsh lesson
John Maslin |

Share Tweet A Wanganui man has a salutary lesson for anyone considering buying a car privately - buyer beware.

Robert Scott was stung when the car he had bought was repossessed because the previous owner failed to meet their financial obligations on loans secured against the vehicle.

Mr Scott had seen a car on Trade Me that he thought was ideal for his family and especially his daughter, and when it did not sell through the site, he made an offer.

He had the car checked out mechanically but overlooked checking the financial background. Nine months later the Hyundai Accent was repossessed, even though the previous owner assured him it was "freehold".

Mr Scott acknowledged he did not do a financial check and admits that was his mistake.

"I took the seller at face value," he said.

"What disappointed me was the fact we had no prior warning from the finance company to say there was an issue with outstanding money owed on the car. Suddenly this guy from the debt collectors turns up on our doorstep, repossessing the car," he said.

"If the finance company had called us, we could have worked something out. We certainly knew where the seller was living at the time."

Mr Scott had paid about $2000 for the car and when the matter of the debt arose, the seller agreed that he would pay the money back.

"We got about $300 from him and that was all.

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By that time he'd left the area and headed north."

That left the Mr Scott $1700 out of pocket. The finance company then sold the repossessed vehicle through the auction process. Mr Scott has since bought another second-hand car off a private seller, but as well as getting the mechanical check he made sure to get a finance check on the vehicle.

There was money owing on that car as well, but he struck a deal with the finance company to pay the outstanding amount to secure possession.

Mr Scott said buyers needed to be aware that buying off unlicensed people was "fraught with difficulty".

"The thing is, there are systems in place to get this stuff thoroughly checked out but sometimes we are just too lazy," Mr Scott said.

MotorWeb is one of the country's leading vehicle history check providers and marketing manager Conrad Heaven said the company had found second-hand car buyers still focused on mechanical checks, unaware of the other risks.

Mr Heaven said those risks included repossession or the vehicle having a substantially lesser value than the purchase price due to previous damage.

MotorWeb's vehicle information report (VIR) provided private car buyers, car dealers, finance companies, and the insurance industry with access to information on vehicles registered in New Zealand.

Between August and October this year the company carried out 268 VIRs in the Wanganui region. Of those, 51 still had money owing on them and 14 had inconsistent odometer readings.

Mr Heaven said MotorWeb encouraged second-hand car buyers to be more vigilant and conduct a detailed check before any money changed hands.

He said there were more than 500,000 cars in the country having money owing and 38,000 cars were sold privately every month. MotorWeb usually carried out more than 150,000 transactions a month for registered motor vehicle traders, finance and insurance companies and private buyers.

The information for the VIRs came from Government and private sector organisations, including the New Zealand Transport Agency and police.

http://www.thenational.ae/news/uae-news/the-winning-bid-takes-the-wheels-in-dubai

2010-12-08T14:19:00.002-07:00

..The winning bid takes the wheels in Dubai
Martin Croucher

Last Updated: Dec 9, 2010

It's a buyer's market: vehicles of all makes and models are on display in the Dubai Municipality's used-car showroom every week
All photos by Ana Bianca Marin

Dana Shaheen, 21, an American, looks at what might be her first car.

A Ford Mustang attracts a number of would-be muscle-car drivers.

On location: Auto Market, Ras al Khor, Dubai.

Once coveted and necessary, the vehicles became such a burden their owners abandoned them to gather dust on the street.

Once a week, however, they become objects of desire once again. At an automobile auction on the outskirts of Dubai, their suitors range from owners of small business owners and average motorists to total petrolheads, all looking for the best deal in town.

Among those at last week's event was Abdullah Bavazeer, an engineer from India who had his heart set on a Peugeot 407 that had been on the auction website for several weeks. When it came up for bids, he was prepared.

"You have to think quickly and you have to know when to stop," he said. "I decided on a price of Dh25,000 and I didn't want to go higher than that."

Mr Bavazeer's quest ended with his winning the bidding at Dh23,000, at the low end of the auction's price spectrum of between Dh20,000 and Dh160,000.

The majority of vehicles in the auction were being sold on behalf of banks because their former owners were unable or unwilling to keep up their loan payments. The vehicles were then repossessed and sold to recoup some of their value.

Some 120 cars are sold every Wednesday at the auto market in Ras al Khor by Golden Bell Auction, which was established in Dubai 10 years ago. Amir Dagash, the company's 48-year-old director, is the auctioneer.

Speaking in a rapid-fire hybrid of Arabic and English, he sounds like an old-fashioned scat singer as he calls the bids.

"Its not just a job, it's a performance," said Mr Dagash, who is from Sudan. "Half of my work is to entertain people. If they are bored they won't sit there for three or four hours."

Mr Dagash has travelled as far afield as London, Los Angeles and Seoul to learn his trade.

He is the third generation of auctioneers in his family and counts his father as his greatest business inspiration. Yet as a father of seven himself, he would not want any of his sons to make a living pounding the gavel.

"It's just too stressful," he said. "I just want to make sure they have the highest qualifications, and then they can make their own decisions."

The auction, which takes place in the Dubai Municipality's used-car showroom complex, is split into two locations: the indoor auction hall and a yard in which the majority of the cars are parked. Inside the auction theatre is a window onto a lighted ramp, up which the cars are driven when their lots are drawn.

The set-up is almost like "catwalk modelling for cars", said Khurram Rizvi, an auditor from India who came looking for a car for personal use. He was not impressed by what was on offer at the auction.

"The prices are about normal market rates and the quality isn't that good," Mr Rizvi said. "You can't take the car for a test drive either."

Still, each car receives a full inspection and their technical faults are listed in detail on the windscreen. The problems ranged from faulty windscreen wipers and dead batteries to bad brakes and body damage.

Still, every vehicle in last week's auction drew at least one bid despite its deficiencies.

Down the road, Mr Bavazeer said he would consider selling a car in the auction because of the event's popularity.

"There are so many cars and so many buyers here," he said. "If you want to sell a car there's a guarantee that it will be sold, by hook or by crook."

http://www.bayofplentytimes.co.nz/local/news/repossessions-spark-car-buying-warning/3932667/

2010-12-03T18:21:00.001-07:00

Repossessions spark car buying warning
Julia Proverbs | 4th December 2010

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New Zealanders generally purchase a new second-hand car every three years. Photo / File. Up to a third of cars being sold privately in the Western Bay could have securities lodged against them, statistics provided by vehicle history check provider MotorWeb show.

And with tough economic times, that is likely to increase.

Wayne Smith of Tauranga didn't think twice when he bought a 4x4 off a "friend of a friend" to tow his boat with. But several months later the vehicle, which cost him $3000, was repossessed, when debts by the previous owner were not honoured. "They used the vehicle to get a loan," Mr Smith said. It had cost him $1500 to get it back, which he had eventually managed to recoup. "It took about a year. Luckily it was only a small amount."

Pam Lang, of Apata, has a similar story. Her teenage son, Ethan, was stung when he bought his first car from a man in Hamilton.

Having paid $3600 hard-earned cash for the car, it was taken away just a month later. "We got a phone call from this guy saying, 'Where is the car because we're coming to repossess it'? He turned up a week later and took it away," Mrs Lang said.

After further investigations they had traced the debt back to a previous Auckland owner, but were able to take action only against the man who sold it to them through the Small Claims Tribunal.

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"They ruled in our favour and the guy in Hamilton had to pay us back the money. I felt very sorry for him."

Of the 2850 checks done by MotorWeb on vehicles in the Western Bay between August and October this year, 946 (33 per cent) had securities registered against them, two were stolen and 266 (9 per cent) had inconsistent odometer readings. In 375 cases (13 per cent) there had been a recent ownership change, which could also be an indicator that not all is as it seems.

Managing director Chris Knight said many car buyers focused on a mechanical inspection when they bought a car.

"But if you buy a car without getting a vehicle history check, you run the risk of it being repossessed or being worth far less than you paid for it.

"As New Zealanders generally purchase a new car every three years and with a sharp increase in second-hand car sales over the summer months, we encourage second-hand car buyers to be more vigilant and conduct a detailed check on the vehicle before any money changes hands."

http://www.herald.ie/national-news/city-news/nows-your-chance-to-get-a-bargain-luxury-sports-car-2445235.html

2010-12-02T10:00:00.000-07:00

Now's your chance to get a bargain luxury sports car
CLEAROUT: Once-wealthy owners forced to sell at fraction of price

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Thursday December 02 2010

LUXURY cars like Aston Martins, Land Rovers, and Jaguars are being seized for resale by Dublin's bailiffs -- as their previously wealthy owners have plummeted into crippling debt.

But the high-end cars are being sold for a mere fraction of their original cost as the bailiffs find it difficult to shift them.

Dublin county sheriff John Fitzpatrick told the Herald: "The cars we've been getting are all higher range.

"They're Jaguars, Mercedes, BMWs, but they've dropped enormously in value and they're very hard to sell.

"We sold an Aston Martin last October, just over a year ago.

"When that car was bought new, I understand it was bought for €250,000 but we sold it for €39,000.

"We sold a 2006 BMW diesel 5-series which was automatic and €15,000 was the most we could get for it."

Up to 20 luxury cars have been seized by the county bailiffs in the past three years, and are proving hard to sell.

"It's very hard nowadays to sell a car like an Aston Martin. It [entails] big tax, and it's a big drinker on petrol."

A garage owner purchased the car when it was repossessed by the County Sheriff, but a few months later, he still had not made the sale.

"He had it up on his website for €69,000 and I asked him had he sold it, and he said he hadn't. People don't want them."

"If you take a three-litre Range Rover, the road tax on that alone is €1,400 or €1,500, and if you have a four litre, it's €2,000. People are not going to pay for them."

Mr Fitzpatrick admitted that certain families who experienced great wealth during the Celtic Tiger years are now being forced to hand over their most prized possessions.

"It's dreadful to see the way people are. We're talking about people who ran a business properly and who would pay their debts if they had it, but there isn't any money."

Meanwhile, a spokesperson for the Dublin City sheriff stressed: "We take hardship into account and we really try to help someone who's genuinely in trouble, we gently extract money from them. If there's a reaction of horror and shock we deal with them sympathetically."

hnews@herald.ie

http://money.cnn.com/2010/11/29/autos/americas_car_Mart.fortune/

2010-11-29T13:58:00.002-07:00

Buy Here, Pay Here: Bottom-feeding for used car buyers in a recession
By Alex Taylor III, senior editor at largeNovember 29, 2010: 12:34 PM ET

FORTUNE -- There is a tiny slice of the car business that targets the least credit-worthy customers and tries to get them into cars they can afford and pay for: "Buy Here, Pay Here" used car dealers. Recently they unexpectedly made the news when it was disclosed that Todd Combs, the man whom Warren Buffett hired to help manage his portfolio, is an investor in one of the industry's biggest players.

The timing is appropriate because if ever a demand existed for Buy Here, Pay Here, or BHPH, it is now. With unemployment high and millions of homes being foreclosed, many people who need transportation find they can't buy any because they have neither cash nor credit. BHPH serves buyers who have few alternatives and are willing to endure steep interest charges -- along with onerous collection tactics if they fall behind.

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BHPH has more to do with lending and collecting money than it does with the traditional car business. The vehicle is merely a commodity, the asset used to secure the loan. One writer described a BHPH outlet as "a bank masquerading as a used car lot."

In the usual sales process, the discussion about how the car will be paid for comes after it has been selected. At a BHPH dealership, the process is reversed. The dealer first determines a buyer's credit history and figures how much he can come up with for the down payment and subsequent monthly payments; only then does he locate an appropriate vehicle.

The cost for this kind of credit is steep -- as much as 20% annually -- and the consequences of missing payments can be abrupt. Some services recommend that dealers install tracking devices so that they can locate vehicles whose owners haven't kept up and stop them from moving until payments resume.

Woe be to those who can't keep up. Although some BHPH dealerships will accept payment by phone or online, many require that the buyer physically bring a check or cash to their locations either monthly or bi-weekly. Some dealers are known to repossess vehicles if the payment is more than a day late.

0:00 /2:29Chevy Cruze: GM's small-car play
"Collections is the focus of our business -- selling cars is not," America's Car-Mart CEO Tilman J. Falgout III said in a 2002 interview. That kind of single-minded focus has helped make his company popular with investors, among them Buffett's Combs.

The company would not comment for this story and referred us to its filings with the Securities and Exchange Commission for further information.

America's Car-Mart (CRMT), which is not to be confused with its Bentonville, Ark.-neighbor Wal-Mart (WMT, Fortune 500), operates dealerships in eight states, and calls itself the largest publicly held car retailer focused exclusively on BHPH.

Car-Mart got started in 1981, when the company's first used-car dealership opened in Rogers, Ark. Its strategy from the beginning was to sell to customers with limited or poor credit. It was an immediate success.

The company targeted communities in rural areas with populations between 20,000 and 50,000. It figured that the absence of mass transit made car ownership more critical in those communities, and the small population made those who missed payments easier to track down.

To make things easier on buyers, Car-Mart advertises that it will trade cars for anything of value -- from electronics to household appliances and farm animals -- but mostly it deals with cash.

A snapshot of Car-Mart's 2009 fiscal year gives a glimpse of a highly-profitable business. Before this year's run-up in used car prices, Car-Mart was paying between $3,000 and $6,000 for its cars. The most popular models were between three and 10 years old and with 90,000 to 130,000 miles on the odometer. They carried names from Detroit's graveyard of discontinued models: Pontiacs and Oldsmobiles, Ford Escorts, and Chevrolet Cavaliers.

Customers seemed to like the selection. Car-Mart says the average retail price of the 29,000 cars it sold in fiscal 2009 was a little over $9,000. That year the company posted $18 million in net income on revenue of $299 million. It did even better in fiscal 2010, netting $28 million on revenues of $339 million.

But the cars were only a small part of the business model. "Collecting customer accounts is perhaps the single most important aspect of operating a buy here/pay here used car business and is a focal point for store level and corporate office personnel on a daily basis," the company says. "Substantially all incentive compensation is tied directly or indirectly to collection results."

Car-Mart keeps customers on a rigid schedule. If a payment is one day late, the customer receives a letter. After three days without payment, the customer receives a telephone call from Car-Mart. Vehicles are repossessed after 40 days without payment.

It is not a process geared to people who have a tough time with deadlines. According to the company, credit losses as a percentage of sales has averaged 22%, and a company history posted on http://www.fundinguniverse.com/ puts the estimated repossession rate at approximately 18%. It is a tough business but a thriving one.

Today, CAR-MART has 101 locations in Arkansas, Alabama, Oklahoma, Missouri, Kentucky, Indiana, Tennessee, and Texas with more than 45,000 customers.

One disclosure you won't find in its financial statements is how many of those customers paid for their vehicles with livestock -- and whether the animals can be used for monthly payments as well. Chances are if that turns out to be a viable business in a depressed economy, some canny operator will find a way to take advantage of that too.

How To Buy A Repo Vehicle

2010-11-23T09:44:00.000-07:00

How To Buy A Repo Vehicle

How To Buy A Repo Vehicle

Print Story Published: 10/27 4:00 am ShareThisUpdated: 4:00 amBy Gary Hoffman, AOL Autos

Buying a repo vehicle can score you a great deal, but is it a safe thing to do? (Michael (mx5tx), Flickr)

(AOL Autos)
Vehicle repossessions are financial tragedies of the first order, but they can be bonanzas for bargain-hunting car shoppers. In one of the few silver linings of today’s economy, more and more repossessed vehicles have streamed into the market, offering consumers at least the possibility of saving thousands of dollars on good -- and sometimes spectacular -- used vehicles.

“Repos can be a good deal if you are smart and know what the market value of the vehicle is," said Jeff Ostroff, publisher of carbuyingtips.com.

About 1.8 million vehicles were repossessed in the U.S. last year, up from a million in 1995. The rising tide hasn’t spared owners of high-end vehicles either, as BMW’s, Jaguars and Cadillacs are well represented on repo lots around the country. Repossessed vehicles are sold from a wide range of venues, from financial institution parking lots and websites to auto brokerages and car auctions.

A Risky Proposition?

Shopping for a repo vehicle can be a trip into uncharted territory. The actual condition of the car, truck or SUV is always the big unknown. Vehicle histories aren’t always available or may be incomplete and repo vehicles usually lack warranties. If owners have been in dire financial straits, they may not have been able to afford regular service for their vehicle. Some have been known to stop maintaining fluid levels or to trash their cars as a parting message to their lender.

In the worst-case scenario, a bargain hunter may not be able to distinguish a repo vehicle from a salvage vehicle. By definition, a salvage vehicle has suffered damage equivalent to at least 70 percent of its value. That means it could be ready for the junkyard -- or have just come from one.

“When something is ‘as is,’ with no warranty, you are assuming 100 percent of the risk," Ostroff said. “If the car were to drop dead after you drive 30 feet off the site, you own it."

Buying From A Dealer

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Perhaps the easiest way to buy a repossessed vehicle is to visit a dealership that specializes in them. While the discounts you’ll get from a dealer may not be as substantial as can be had at an auction, buying from a dealership offers another upside. Without the high-pressure environment of an auction, buyers may be able to do a more thorough inspection of the vehicle.

And even at a dealership, buying a repo car can save you plenty. For example, Schultz Auto Brokers of Wayne, Michigan, recently put a $10,500 price on 2004 Audi A8L Quattro, which was about $2,000-$4,000 below its book value. In mid-October, a 2002 Jaguar XJR was priced at $9,500 -- as much as $4,000 below its value.

Direct From The Lender

Another option for buying a repo is to inquire at your local bank or credit union, as some financial institutions offer repossessed vehicles for sale directly at a branch or on websites.

If a vehicle is in good shape, a credit union may be tempted to sell it directly to one of its members, said John Kurtz of the Texas Credit Union League. He has seen credit unions market their repos from branch parking lots. Sometimes, members will be given a chance to bid on a car over a period of several days, with the vehicle going to the person who makes highest bid over a set minimum.

Some institutions will also sell repo vehicles for fixed prices. Buyers benefit in two ways, as they pay a fairly low price for a used car and get rock-bottom interest rates in the bargain.

“Credit unions usually set the sales price to cover the amount owed on the loan,” Kurtz said. “They offer interest rates as low as zero percent on the car, but there is no bargaining on the price.”

You can obtain financing quotes from your local bank or credit union or for free online by using sites such as car.com.

A repo car tends to be in the best shape if the borrower has turned it in voluntarily, Kurtz said. So a consumer would be wise to ask how the car was repossessed. If a car has been abused, the credit union often won’t be selling it on its own -- it’s usually taken to auction, he said.

Buying At Auction

This is the classic strategy for buying a repossessed vehicle, and the way some savvy buyers have been known to reap the biggest savings.

Jeff Karpinski, general manager of the Greater Detroit Auto Auction in Brownstown, Mich., said bidders can generally count on good prices at his events. “On the bank repossessions, the prices are almost always below Blue Book,” he said. “That’s just the way the auction formats work.” Bidders tend to be cost-conscious and don’t drive prices beyond that level, he said.

Auctions also pose a special challenge to consumers. Vehicles in every imaginable condition are on the lot, and it can be hard to find a good one. Vehicle documentation is another issue. In many cases, that can be in even worse condition than the cars. One of the clear signs to walk away from a deal is that there’s no title, which means a buyer may have problems proving ownership or licensing a vehicle for the road.

A buyer might be told that the title is "in transit,” but according to Ostroff, “There is no reason for the bank or the repo company to not have a title.”

Some auctions make the process a bit easier for buyers. At Greater Detroit Auto Auction, bank repos account for just a small portion of the 300 to 500 vehicles auctioned each week at his company, and they are clearly designated on its bid lists, Karpinski said. Each comes with a vehicle history and a title in the bank’s name, with VIN numbers and pictures posted on Greater Detroit Auto Auction’s website. Creditworthy buyers can even head into the auction with pre-approved financing from a credit union affiliated with the auction.

Many auction houses even offer customers the chance to inspect and drive vehicles before the bidding starts. Interstate Auto Auctions in Salem, New Hampshire, for example, holds auctions on Wednesdays and Saturdays and gives bidders access to vehicles for several hours before each event.

In this uncertain environment, buyers ought to at least exercise some control over the price they are willing to pay. Ostroff recommends that buyers set their maximum bid in advance. In the weeks before the auction, they can go on eBay and look at successful bids to get a price range for the models they are targeting, he said.

“Because you are taking on additional risk, you want to get the car even cheaper than those prices,” said Ostroff. “If your bid isn’t accepted, that’s fine. If it is, then you got a really good deal on something that is in your price range.”

And that, of course, is what makes all the effort worthwhile.

http://wcfcourier.com/news/local/article_0d0c4bec-aa79-5acf-b8a4-8eeec1cceb1c.html

2010-11-07T21:18:00.000-07:00

Cedar Valley agent says media image of repossession job distorted

By JIM OFFNER, jim.offner@wcfcourier.com | Posted: Sunday, November 7, 2010 8:30 pm | (0) Comments

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Jim Bellows loads up a Cadillac SRX Crossover in a parking lot for a repossession Oct. 20, 2010, in Cedar Falls, Iowa. (MATTHEW PUTNEY / Courier Photo Editor)

WATERLOO, Iowa --- If Jim Bellows wants your car, he'd like to talk to you.

Bellows is a "repo man" --- a repossession agent. It's his job to find a debtor who has fallen behind on car payments and hasten the matter's resolution.

That often begins by taking possession of the vehicle.

It doesn't have to be an unpleasant confrontation.

In fact, Bellows said, he prefers that it not come to that. His preference is to talk calmly with the debtor, explain the situation and urge them to get the matter settled with the lienholder.

He'll take the car; he'll also bring it back, in some cases.

"I've actually gotten thank-you cards from people I've dealt with," he said.

Bellows, owner of Starlight Recovery & Investigations in Parkersburg, bristles at the popular conception of the repo man.

Sure, he said, repossessing a vehicle can be dangerous work. And the media portrayal of the repossession agent as a cold, calculating loner who is good at hot-wiring vehicles and is always ready for the next high-speed chase or violent confrontation certainly doesn't make it any easier.

"The big, bad, mean person coming out who's going to get into a fight with you, and guns are going to get drawn --- it doesn't work that way," Bellows said.

He said it's difficult to neutralize that stereotype as he goes about his business.

"You go out there, and you don't want problems," said Bellows, 43, who also is a private investigator. "You want most of all to talk to people and help them understand this is not the end of the world."

Walking a fine line

A repo man has to walk a fine line, or somebody on either side of the encounter could come to a bad end, Bellows said.

He said there have been times at which he has had guns pointed at him and others in which debtors tried to run him over in their vehicles.

Bellows doesn't carry a weapon, so there are few options in that situation, he said.

"I just leave, call the police, make a report," he said.

Bellows, who has been self-employed for about 20 years, since a stint as an airplane mechanic in the U.S. Navy, has been a repossession agent for about 12 years. He started SRI seven years ago. His wife, Andrea, helps him run the business. The company typically repossesses about 20 vehicles in a week, he said.

Bellows' son, David, also was involved in the business until March 3, the day he was killed in a traffic accident. He was en route to repossess a vehicle in Cedar Rapids, when a truck collided with his tow truck, Bellows said. The accident was only coincidental to David's assignment, Jim Bellows said.

In September, David's name was etched onto the Wall of the Fallen at the International Towing & Recovery Hall of Fame & Museum in Chattanooga, Tenn. The Wall honors towing and recovery agents who have lost their lives in the line of duty.

"He loved doing it; he tried college for a year and came back to it," Bellows said. "That's what he wanted to do."

David also knew first-hand of the job's inherent dangers, his father said.

"David was down in Cedar Rapids on a repossession in a brand new truck we just bought," Bellows said. "A guy came out with a switch blade and sliced both tires and halfway looked up and tried getting into the truck after him."

The younger Bellows quickly locked the tow truck's doors and called the police.

"They came out, but at the same time, in this business, if people don't have money to pay for the car, you certainly don't have money to pay for damages to your tow truck," Bellows said. "So, that's $500-600 for tires. You can get a judgment, but they don't have any money."

It's just part of the job, he said.

So is the danger.

"That's why a lot of times, I tell the police, 'You guys go out with a gun and a badge and a radio to get backup like that,'" Bellows said, snapping his fingers. We go out a lot of times by ourselves and the areas are bad. Most of the time, it's not a bad situation, but sometimes it does turn into a bad situation and we don't have backup."

Psychology a big part of the job

There's a lot more to the job than being able to handle a tow truck, Bellows said.

"There are people who know how to tow and there are people who know how to repossess, and you'd better know how to repossess," he said.

The psychology behind the job cannot be underestimated, Bellows said.

"You have to know how to treat people, listen to people, because everybody wants to tell us why their stuff is getting repossessed," he said. "Everybody wants to kind of spout off and steam off, go off. But 99 percent of the time, you're not going to have a problem."

Bellows says he doesn't want to embarrass anyone and will pick up a vehicle someplace other than the debtor's home or place of business, if it's workable.

"I've been pretty compassionate," he said. "You can talk to people. I don't want to go to your place of employment. I don't want to go to your neighbors. If I can help it and I can say, 'I'll meet you over at Kmart or down the street,' I'm all for it."

He said he repossesses new and old vehicles, but in the current economic slump, there have been a lot of new cars on his daily runs.

"Right now, it's all over," he said. "It's a lot worse with the stimulation thing. A lot of people probably shouldn't have gotten new cars, because we're seeing a lot newer stuff."

Banks are under the government microscope, so they'll contract for repossession more quickly today than before, Bellows said.

"They're in default and the government is looking at the bank," he said. "With this economy, the banks today are getting microscoped, so they have to pick the stuff up even after one payments, two payments, whatever it is."

Area lending institutions that make vehicle loans say their repossession counts actually have been down recently.

"Our actual average for this year has been lower than the last three or four years," said Mark Heth, president and CEO of Iowa Community Credit Union in Cedar Falls. "I think this Cash For Clunkers may have come back to hurt some lenders, especially lenders that are doing a lot of indirect lending, but we've been very fortunate that our members have paid us."

Joe Vich, president of Community National Bank in Waterloo, said his bank has had relatively few repossessions.

"Traditionally, we've had very few," he said. "There's not much of a change for us, and that's good news.

The process for repossessing a vehicle varies, Vich said.

"Often, if you can communicate with a customer, they'll cooperate and you don't have to hire a repossession person. If not, that's obviously one of the alternatives."

The lender takes possession

If a lender repossesses a vehicle, it may be sold at auction. Or, the lender might try to sell the vehicle itself.

"It varies by institution," Vich said.

Plaza Auto Auction in Mount Vernon has as many as 400 vehicles --- perhaps 10 percent of which are repossessions --- at its weekly auction Wednesdays, said Mark Greb, president auction firm.

He also said the number of repossessed vehicles that reach his auction block is down.

"The amount of repossessions is down compared to what it was last year and the year before," he said. "We attribute that to the tightening of lending practices and the retail public's tightening their belts and not trying to stretch the money that they have."

Debtors sometimes are eager to unload their vehicles, Bellows said.

"A lot of times, they've called the bank and they want it picked up," he said.

But the banks don't necessarily want to have to go through the repossession process, he added.

"They are hoping that the people will go ahead and pay for it a month or month and a half and two months down the road," he said. "They don't want these cars. They lose money."

The repo routine varies, Bellows said, but there are certain tasks that go with all jobs.

"We get stuff over the fax machine or computers from the banks," he said. "We do a lot of background work before I go out."

Finding a debtor often is the heart of the research phase, Bellows said.

"With a lot of people, these loans may be two or three years old and they moved," he said.

Bellows will try to contact the debtor before making a run.

"I'll talk to people and see what we can do," he said.

Once the vehicle is secured, it is brought back to a storage yard, and Bellows sends a condition report to the bank.

"Hopefully they'll catch up with the customer, and hopefully they'll pay for it," Bellows said.

Ultimately, the vehicle can end up back in the debtor's possession, Bellows said.

The job used to get to Bellows, and he'd seek out advice from his pastor.

"Our pastor would say if you don't do it, there's somebody else who has to," he said. "You treat people with the respect they need to be treated with and that's what it's about. That's why I keep doing it. You've got to know how to handle this situation. Keep it business and not personal."

How difficult is that?

"It's real difficult at times."

It's also important to understand a debtor's situation, Bellows said.

"Losing a car is not the end of the world; it's just a possession," he said. "I have a good friend who committed suicide over losing his semi. To me, everybody gets distraught when they lose possessions. They have medical problems and lost jobs. But you're still here; you're still able to make it. You lose a car, you lose a car. But you're still here, and things can get better."

http://wcfcourier.com/news/local/article_589933d4-b7a1-56b7-be3b-691c89f41e85.html?mode=story

2010-11-07T12:23:00.002-07:00

Home / News / Local

Lenders: Repossession the last option

By JIM OFFNER, jim.offner@wcfcourier.com | Posted: Sunday, November 7, 2010 8:30 pm | (0) Comments

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WATERLOO --- Lenders say repossession is the last --- and least preferred --- option in dealing with a lapsed vehicle payment plan.
Veridian Credit Union in Waterloo reported a 38 percent increase in repossessions from 2008 to 2009 but also emphasized that its loan volume also rose 26 percent in that same period and that it is "on track" to finish the 2009-2010 period with a 10 percent decrease in repossessions.
Trina Becker, manager of collections at Veridian Credit Union in Waterloo, answered some questions about her institution's end of the process.
Q: Where are repos trending currently? New cars? Used cars?
A: The majority of our repossessed vehicles are used cars --- only about 6 percent of our repossessions are new vehicles.
Q: What, if any, effect did the so-called "Cash for Clunkers" program have on repossession trends?
A: The main effect of the Cash for Clunkers program was the prices repossession businesses received at auction for cars. Dealers were looking to put used cars back on their lots, so they were willing to pay a little more at auction for the vehicle, which helps in the recovery of losses on repossessions. This trend has since slowed down as more used cars are now in the market.
Q: How does the repo process work? What does Veridian do to try to work out avoiding a repo situation?
A: Repossession is our last resort. We don't want the vehicle to return, as it causes more loss for the member and for the credit union. At Veridian, we try to look at every member's situation separately and see if there is any way we can help them keep their vehicle. There are situations where the member just cannot afford the vehicle and repossession is the only option. In that case, if the member is cooperative, works with us and brings in the vehicle voluntarily, it will save on costs and expenses for everyone.
Q: How many repossession agents does Veridian work with?
A: Veridian works with several repossession agents throughout Iowa and out-of-state.
Q: How long does Veridian wait before contacting a repossession agent?
A: This varies on the member situation.
Q: What happens then?
A: Once the repossessor is notified of a vehicle that needs to be picked up, they find it, clean it up and prepare it for sale. Members are responsible for the remaining balance of the loan, as well as any repossession and clean-up fees incurred, even on a voluntary repossession.
Q: Does Veridian sell its repossessed vehicles?
A: Veridian currently sells vehicles several different ways. We send them to dealer auctions and public auctions that are open to anyone. We have sold them in our Swap Sheet and also online. We use several different dealer auctions in Iowa and out-of-state.

http://autos.aol.com/article/how-to-buy-repo-vehicle/#comments

2010-10-29T10:26:00.000-06:00

How To Buy A Repo Vehicle

A Tough Economy Means Deals Abound

Posted: Oct 26, 2010

Buying a repo vehicle can score you a great deal, but is it a safe thing to do? (Michael (mx5tx), Flickr)

by: Gary Hoffman | AOL Autos

See More Articles
from this Author

Vehicle repossessions are financial tragedies of the first order, but they can be bonanzas for bargain-hunting car shoppers. In one of the few silver linings of today’s economy, more and more repossessed vehicles have streamed into the market, offering consumers at least the possibility of saving thousands of dollars on good -- and sometimes spectacular -- used vehicles.
“Repos can be a good deal if you are smart and know what the market value of the vehicle is," said Jeff Ostroff, publisher of carbuyingtips.com.
About 1.8 million vehicles were repossessed in the U.S. last year, up from a million in 1995. The rising tide hasn’t spared owners of high-end vehicles either, as BMW’s, Jaguars and Cadillacs are well represented on repo lots around the country. Repossessed vehicles are sold from a wide range of venues, from financial institution parking lots and websites to auto brokerages and car auctions.

A Risky Proposition?

Shopping for a repo vehicle can be a trip into uncharted territory. The actual condition of the car, truck or SUV is always the big unknown. Vehicle histories aren’t always available or may be incomplete and repo vehicles usually lack warranties. If owners have been in dire financial straits, they may not have been able to afford regular service for their vehicle. Some have been known to stop maintaining fluid levels or to trash their cars as a parting message to their lender.
In the worst-case scenario, a bargain hunter may not be able to distinguish a repo vehicle from a salvage vehicle. By definition, a salvage vehicle has suffered damage equivalent to at least 70 percent of its value. That means it could be ready for the junkyard -- or have just come from one.
“When something is ‘as is,’ with no warranty, you are assuming 100 percent of the risk," Ostroff said. “If the car were to drop dead after you drive 30 feet off the site, you own it."

Buying From A Dealer

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Perhaps the easiest way to buy a repossessed vehicle is to visit a dealership that specializes in them. While the discounts you’ll get from a dealer may not be as substantial as can be had at an auction, buying from a dealership offers another upside. Without the high-pressure environment of an auction, buyers may be able to do a more thorough inspection of the vehicle.
And even at a dealership, buying a repo car can save you plenty. For example, Schultz Auto Brokers of Wayne, Michigan, recently put a $10,500 price on 2004 Audi A8L Quattro, which was about $2,000-$4,000 below its book value. In mid-October, a 2002 Jaguar XJR was priced at $9,500 -- as much as $4,000 below its value.

Direct From The Lender

Another option for buying a repo is to inquire at your local bank or credit union, as some financial institutions offer repossessed vehicles for sale directly at a branch or on websites.
If a vehicle is in good shape, a credit union may be tempted to sell it directly to one of its members, said John Kurtz of the Texas Credit Union League. He has seen credit unions market their repos from branch parking lots. Sometimes, members will be given a chance to bid on a car over a period of several days, with the vehicle going to the person who makes highest bid over a set minimum.
Some institutions will also sell repo vehicles for fixed prices. Buyers benefit in two ways, as they pay a fairly low price for a used car and get rock-bottom interest rates in the bargain.
“Credit unions usually set the sales price to cover the amount owed on the loan,” Kurtz said. “They offer interest rates as low as zero percent on the car, but there is no bargaining on the price.”
You can obtain financing quotes from your local bank or credit union or for free online by using sites such as car.com.
A repo car tends to be in the best shape if the borrower has turned it in voluntarily, Kurtz said. So a consumer would be wise to ask how the car was repossessed. If a car has been abused, the credit union often won’t be selling it on its own -- it’s usually taken to auction, he said.

Buying At Auction

AOL Autos Poll

Would you buy a repo vehicle?

69%Yes. I want that great deal!
30%No. It's much too risky.

Total Votes: 4,208

This is the classic strategy for buying a repossessed vehicle, and the way some savvy buyers have been known to reap the biggest savings.
Jeff Karpinski, general manager of the Greater Detroit Auto Auction in Brownstown, Mich., said bidders can generally count on good prices at his events. “On the bank repossessions, the prices are almost always below Blue Book,” he said. “That’s just the way the auction formats work.” Bidders tend to be cost-conscious and don’t drive prices beyond that level, he said.
Auctions also pose a special challenge to consumers. Vehicles in every imaginable condition are on the lot, and it can be hard to find a good one. Vehicle documentation is another issue. In many cases, that can be in even worse condition than the cars. One of the clear signs to walk away from a deal is that there’s no title, which means a buyer may have problems proving ownership or licensing a vehicle for the road.
A buyer might be told that the title is "in transit,” but according to Ostroff, “There is no reason for the bank or the repo company to not have a title.”
Some auctions make the process a bit easier for buyers. At Greater Detroit Auto Auction, bank repos account for just a small portion of the 300 to 500 vehicles auctioned each week at his company, and they are clearly designated on its bid lists, Karpinski said. Each comes with a vehicle history and a title in the bank’s name, with VIN numbers and pictures posted on Greater Detroit Auto Auction’s website. Creditworthy buyers can even head into the auction with pre-approved financing from a credit union affiliated with the auction.
Many auction houses even offer customers the chance to inspect and drive vehicles before the bidding starts. Interstate Auto Auctions in Salem, New Hampshire, for example, holds auctions on Wednesdays and Saturdays and gives bidders access to vehicles for several hours before each event.
In this uncertain environment, buyers ought to at least exercise some control over the price they are willing to pay. Ostroff recommends that buyers set their maximum bid in advance. In the weeks before the auction, they can go on eBay and look at successful bids to get a price range for the models they are targeting, he said.
“Because you are taking on additional risk, you want to get the car even cheaper than those prices,” said Ostroff. “If your bid isn’t accepted, that’s fine. If it is, then you got a really good deal on something that is in your price range.”
And that, of course, is what makes all the effort worthwhile.

http://content.usatoday.com/communities/driveon/post/2010/10/how-to-saving-thousands-by-buying-a-repo/1#Register

2010-10-29T09:12:00.000-06:00

How to saving thousands by buying a repo

08:40 AM

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1 Comments

Vehicle repossessions are financial tragedies of the first order, but they can be bonanzas for bargain-hunting car shoppers. So says Gary Hoffman, writing for AOL Autos:
In one of the few silver linings of today's economy, more and more repossessed vehicles have streamed into the market, offering consumers at least the possibility of saving thousands of dollars on good -- and sometimes spectacular -- used vehicles.
"Repos can be a good deal if you are smart and know what the market value of the vehicle is," said Jeff Ostroff, publisher of carbuyingtips.com.
About 1.8 million vehicles were repossessed in the U.S. last year, up from a million in 1995. The rising tide hasn't spared owners of high-end vehicles either, as BMW's, Jaguars and Cadillacs are well represented on repo lots around the country. Repossessed vehicles are sold from a wide range of venues, from financial institution parking lots and websites to auto brokerages and car auctions.
A risky proposition?
Shopping for a repo vehicle can be a trip into uncharted territory. The actual condition of the car, truck or SUV is always the big unknown. Vehicle histories aren't always available or may be incomplete and repo vehicles usually lack warranties. If owners have been in dire financial straits, they may not have been able to afford regular service for their vehicle. Some have been known to stop maintaining fluid levels or to trash their cars as a parting message to their lender.
In the worst-case scenario, a bargain hunter may not be able to distinguish a repo vehicle from a salvage vehicle. By definition, a salvage vehicle has suffered damage equivalent to at least 70 percent of its value. That means it could be ready for the junkyard -- or have just come from one.
"When something is 'as is,' with no warranty, you are assuming 100 percent of the risk," Ostroff said. "If the car were to drop dead after you drive 30 feet off the site, you own it."
Perhaps the easiest way to buy a repossessed vehicle is to visit a dealership that specializes in them. While the discounts you'll get from a dealer may not be as substantial as can be had at an auction, buying from a dealership offers another upside. Without the high-pressure environment of an auction, buyers may be able to do a more thorough inspection of the vehicle.
And even at a dealership, buying a repo car can save you plenty. For example, Schultz Auto Brokers of Wayne, Michigan, recently put a $10,500 price on 2004 Audi A8L Quattro, which was about $2,000-$4,000 below its book value. In mid-October, a 2002 Jaguar XJR was priced at $9,500 -- as much as $4,000 below its value.
Another option for buying a repo is to inquire at your local bank or credit union, as some financial institutions offer repossessed vehicles for sale directly at a branch or on websites.
If a vehicle is in good shape, a credit union may be tempted to sell it directly to one of its members, said John Kurtz of the Texas Credit Union League. He has seen credit unions market their repos from branch parking lots. Sometimes, members will be given a chance to bid on a car over a period of several days, with the vehicle going to the person who makes highest bid over a set minimum.
Some institutions will also sell repo vehicles for fixed prices. Buyers benefit in two ways, as they pay a fairly low price for a used car and get rock-bottom interest rates in the bargain.
"Credit unions usually set the sales price to cover the amount owed on the loan," Kurtz said. "They offer interest rates as low as zero percent on the car, but there is no bargaining on the price."
A repo car tends to be in the best shape if the borrower has turned it in voluntarily, Kurtz said. So a consumer would be wise to ask how the car was repossessed. If a car has been abused, the credit union often won't be selling it on its own -- it's usually taken to auction, he said.
This is the classic strategy for buying a repossessed vehicle, and the way some savvy buyers have been known to reap the biggest savings.
Jeff Karpinski, general manager of the Greater Detroit Auto Auction in Brownstown, Mich., said bidders can generally count on good prices at his events. "On the bank repossessions, the prices are almost always below Blue Book," he said. "That's just the way the auction formats work." Bidders tend to be cost-conscious and don't drive prices beyond that level, he said.
Auctions also pose a special challenge to consumers. Vehicles in every imaginable condition are on the lot, and it can be hard to find a good one. Vehicle documentation is another issue. In many cases, that can be in even worse condition than the cars. One of the clear signs to walk away from a deal is that there's no title, which means a buyer may have problems proving ownership or licensing a vehicle for the road.
A buyer might be told that the title is "in transit," but according to Ostroff, "There is no reason for the bank or the repo company to not have a title."
Some auctions make the process a bit easier for buyers. At Greater Detroit Auto Auction, bank repos account for just a small portion of the 300 to 500 vehicles auctioned each week at his company, and they are clearly designated on its bid lists, Karpinski said. Each comes with a vehicle history and a title in the bank's name, with VIN numbers and pictures posted on Greater Detroit Auto Auction's website. Creditworthy buyers can even head into the auction with pre-approved financing from a credit union affiliated with the auction.
Many auction houses even offer customers the chance to inspect and drive vehicles before the bidding starts. Interstate Auto Auctions in Salem, New Hampshire, for example, holds auctions on Wednesdays and Saturdays and gives bidders access to vehicles for several hours before each event.
In this uncertain environment, buyers ought to at least exercise some control over the price they are willing to pay. Ostroff recommends that buyers set their maximum bid in advance. In the weeks before the auction, they can go on eBay and look at successful bids to get a price range for the models they are targeting, he said.
"Because you are taking on additional risk, you want to get the car even cheaper than those prices," said Ostroff. "If your bid isn't accepted, that's fine. If it is, then you got a really good deal on something that is in your price range."
And that, of course, is what makes all the effort worthwhile.

http://www.ksl.com/?nid=148&sid=12992514

2010-10-27T17:43:00.000-06:00

Utah among highest in foreclosure rates

October 27th, 2010 @ 4:23pm

By Jason Lee

SALT LAKE CITY -- Utah and its largest metropolitan areas are again among the nation's highest foreclosure rates, according to a new report.

RealtyTrac -- an Irvine, Calif.-based market research firm -- released its Q3 2010 Metropolitan Foreclosure Market Report, which ranked Provo-Orem at No. 30, Salt Lake City at No. 31 and Ogden-Clearfield at No. 58 all in the top foreclosure rates for the third quarter among metropolitan areas with a population of at least 200,000 people.

Wells Fargo erred in thousands of foreclosures
Wells Fargo admitted Wednesday it made mistakes in the paperwork for thousands of foreclosure cases and promised to fix them.

Both Provo-Orem and Salt Lake City recorded one foreclosure filing for every 77 housing units, while Ogden-Clearfield had one filing for every 126 households, the report stated.

Data obtained by the Deseret News from RealtyTrac also showed that southern Utah's largest metro area, St. George, recorded one filing for every 52 housing units. Because of its smaller population, St. George was not included in the report.
Foreclosure-related filings include default notices, scheduled auctions and bank repossessions.
The national average was one foreclosure filing for every 139 housing units, according to the report.
Las Vegas-Paradise, Nev., continued to post the nation's highest metro foreclosure rate in the third quarter, with one in every 25 housing units receiving a foreclosure filing -- more than five times the national average. Cape Coral-Fort Myers, Fla., documented the nation's second highest metro foreclosure rate, with one in every 35 housing units receiving a filing during the period.
With one in every 36 housing units receiving a foreclosure filing during the third quarter, Modesto, Calif., posted the third-highest metro foreclosure rate despite an 18 percent decrease in foreclosure activity from the third quarter of 2009, the release stated.
The report showed that cities in California, Florida, Nevada and Arizona accounted for all top 10 foreclosure rates in the third quarter. California, Florida, Nevada and Arizona cities also accounted for 19 of the top 20 metro foreclosure rates. The only exception was Boise City-Nampa, Idaho. At No. 14, it was also one of only five metro areas ranking in the top 20 to post a year-over-year increase in foreclosure activity.
"The underlying problems that are causing homeowners to miss their mortgage payments -- high unemployment, underemployment, toxic loans and negative equity-- are continuing to plague most local housing markets," said James Saccacio, chief executive officer of RealtyTrac. "And these historically high foreclosure rates will continue until those problems are resolved."

http://www.marketwatch.com/story/new-normal-in-housing-and-manufacturing-2010-10-22?reflink=MW_news_stmp

2010-10-22T09:30:00.002-06:00

The new normal in housing and industry

Commentary: Distressing trends foreshadow a sluggish economy

By Barry Wood

WASHINGTON (MarkwetWatch) — A couple of recent news items suggest that the new normal of sluggish growth is making its way through the troubled U.S. economy.

Last Saturday, 100 or so members of the United Auto Workers picketed their own union headquarters in Detroit to protest an agreement that allows the new General Motors to pay some workers half of what had been a $28-per-hour union wage. This second-tier wage structure is set to take effect at GM plant near Pontiac, Mich., which will assemble small cars previously manufactured in South Korea.

Fed's bond buying won't help

Whatever the Federal Reserve does to lower interest rates further won't help the U.S. economy, according to First Pacific Advisors fund manager Tom Atteberry, who says that'll just weaken the dollar and hurt savers. Deborah Levine reports.

Unemployment in Pontiac is 30% and the financial situation there is so dire that the police department is to be disbanded and public safety turned over to the county in order to save $2 million per year. The idled GM plant 10 miles north of Pontiac at Lake Orion would employ 1,500 workers.
Michigan lawmakers and the business community lobbied aggressively to persuade GM to manufacture the new small-size Chevys and Buicks in Michigan. The company, which received billions from taxpayers to recover from last year’s bankruptcy, finally agreed, but said the Lake Orion plant wouldn’t be profitable unless the lower wage scale was in place.
Welcome to the new normal in manufacturing.

In Chicago recently, Jamie Dimon, head of J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 37.62, -0.08, -0.21%) presented a particularly gloomy economic outlook prepared by the chief economists of 150 of the nation’s biggest companies.

Dimon said business confidence had fallen by a third in just the past six months. He worries that the economy is growing so slowly that unemployment is likely to remain above 9% throughout 2011.

Bank stocks meanwhile plummeted as investors pondered the latest debacle in the residential mortgage market where botched documentation procedures by mortgage servicers have led a de facto moratorium on residential foreclosures. The prospect of huge additional losses on bad mortgage loans sent shares of Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 11.45, +0.09, +0.79%) down 11%.

Several housing economists worry that a delay in foreclosures will prolong the three-year-long devastating slump in residential housing. They argue that foreclosures need to be speeded up not slowed down. Joshua Shapiro, housing specialist at MFR in New York, says, “the best thing is for prices to get to a level that clears the market.”
Currently, many realtors say that since the government’s tax credit on home purchases expired in April, prospective buyers have been staying out of the market on the expectation that prices will fall further. That is a sentiment shared by housing economist Mark Zandi in West Chester, Penn., who believes home prices are likely to decline another 5% before the market begins to slowly recover probably in 2013. Zandi likewise says, “the sooner we work through this (foreclosure inventory) the sooner the economy can take off.” Tony Downs, a housing specialist at Washington’s Brookings Institution, is more pessimistic, saying that home prices may keep declining for another five years.
Nationally home prices are down about 30% from their 2006 peak, and 25% of all homeowners are underwater on their mortgages. Zillow, the housing data company, says that there are 8 million empty or foreclosed homes in the country and that 3.8 million more could slip into that category. Christopher Whalen of International Risk Analytics says only 25% of likely foreclosures have yet occurred.
Mortgage interest rates, meanwhile, are at their lowest levels since 1951 with a 30-year mortgage now available at 4.19%. Despite a high affordability index and extraordinarily low rates, the property market remains depressed. Calling the housing market a disaster, John Makin of the American Enterprise Institute in Washington jokes that the best way to price a home is to take the assessed value and multiply by 0.5.
Mark Fogarty of the National Mortgage News dryly observed recently that because so many homes have been repossessed, banks are selling more homes than builders. If, as Fogarty asserts, housing typically leads the nation into recession and also leads it out, the hard times will be with us quite a while longer.
Welcome to the new normal in housing.

Barry Wood is a former economics correspondent for Voice of America.

http://money.cnn.com/2010/10/21/real_estate/buying_a_foreclosure/index.htm

2010-10-21T10:55:00.002-06:00

How to buy a foreclosure in a robo-signing world

By Les Christie, staff writerOctober 21, 2010: 8:39 AM ET

NEW YORK (CNNMoney.com) -- You want to buy a foreclosure? It has gotten a lot harder the past couple of weeks.
The fallout over "robo-signing" -- where bank executives sign off on foreclosure filings without reviewing the paperwork to make sure they're valid -- has led to a freeze on foreclosure sales, limiting the number of properties available.

In South Florida, for example, the inventory of repossessions -- also known as bank-owned properties -- for sale sank nearly 20% between late September and October 18, according to Peter Zalewski of Condo Vultures.
"The whole distressed property market is probably going quiet until the freeze ends," he said.
But, there are still bargains out there to be had for buyers who are willing to do some extra work.
"The safest and best way to buy is still when it's a bank-owned property," said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties. "As long as there's a clear title and the buyer can get title insurance, it's a great time to buy."
In addition to bank-owned properties, there are two types of foreclosures you can buy: 1. pre-foreclosure; 2. sheriff's auction. All three are affected by concerns over the way foreclosures have been handled.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are "underwater," owing more on the homes than they are worth.

12 cities: Where to rent vs. where to buy

As a result, potential buyers must negotiate a deal with the lender as well as the owner. That makes buying complicated and slow. But, you have the advantage of being able to inspect the home before purchase -- which isn't the case at foreclosure auctions. Sharga warned, however, that prices are usually higher than at other stages of foreclosure.
Should you be afraid to buy? There are no special concerns over ownership rights of former owners. The sellers agree to the deal before it's a completed foreclosure, so buyers can purchase with confidence.
Sheriff's auction: These sales yield the lowest prices, but they are fraught with difficulties. Often the house is unavailable for inspection, leaving buyers with a long list of expensive repairs -- and much larger bill than they intended. This stage is usually best left to professionals, contractors and investors who regularly bid on these places and know what they're doing.
Should you be afraid to buy? The foreclosure freeze means that these sales are not taking place right now but the banks have already started to announce that they are planning to refile cleaned-up foreclosure affidavits and expect to resume auctions soon. Once they restart, the banks will have presumably cleaned up the paperwork, meaning these homes shouldn't have any paperwork problems.

Repossession: This occurs when the bank buys the property at a sheriff's auction, which usually happens when there are no other bidders. Homebuyers may not get the best bargains during this stage, but they can nearly always perform a thorough inspection before closing, minimizing costly surprises. Plus, the property normally comes with a clear title.
Should you be afraid to buy? The robo-signings have now muddied the issues of who actually owns the property, making these purchases more of a crap shoot. Buyers may be concerned that former owners could challenge the legality of the foreclosure process.
On the plus side, the banks often extend preferential financing terms to buyers and may have made some repairs before putting the property on the market.
Homes are still usually sold in "as is" condition. "That means the bank won't pay for cosmetic issues," said Adam Wiener, a spokesman for the Redfin, the online real estate marketer. "Although, they will often pay for some or all of repairs that are health and safety issues. That makes the home inspection even more critical."

Can you afford the yuppie dream house?

The freeze on foreclosure auctions means that new REOs are not hitting the market, shrinking REO inventory. Some lenders have even pulled repossessed homes from the market to double check their paperwork and make sure they have clear title before they sell them.
Once it opens up again and you've decided which type of home to buy, there are several common mistakes foreclosure buyers should take care to avoid. These include:
Getting caught up in a bidding frenzy: The banks often under-price repossessions, hoping to generate excitement, attract multiple bids and sell them quickly. The problem is, as in any auction-type sale, bidders get excited and pay too much.
"Remember," said Sharga, "there are 800,000 REOs in the banks' inventories. There'll be another home to bid on tomorrow."
Underestimating repair costs: Take full advantage of the home inspection and don't delude yourself about much the repairs will cost.
"Take along someone who can give you a good estimate of how much repair costs will come to," said Sharga.
Redfin coaches its agents to warn buyers to factor in a cushion of 10% to 20% of the purchase price to pay for unexpected repairs. "If you end up not using it, go on vacation after 6 months," Wiener said.
Not knowing what comparable properties cost: This is important in any market but especially in this endeavor. In high foreclosure areas, prices can be eroding very quickly. You want to have the latest homes sale prices on repossessed properties and try to keep your bid comparable or lower.
Buying in a neighborhood flooded with foreclosures: This is most important for people buying for the short-term. Any neighborhood saturated with REOs and foreclosures may be headed for further price falls. If you're planning to relocate within a few years or buying a bigger house, that could mean selling at a loss. A better bet, if you can find it, is to buy the only foreclosed home in an otherwise stable community. That's more likely to hold its value.
Not having financing in place: If you don't have a pre-approved mortgage, you're really not in the market. "You have to be able to move quickly," Sharga said.
Banks don't want to dilly-dally on sales; they're losing money every day that homes sit on the market. That means they'll often jump on the highest bid with the best financing already in place.
Having a loan beforehand carries another advantage: It tells you how much credit you have available. You won't spend time shopping for homes that are too expensive.

Remember that pre-approved financing is different from pre-qualified financing; it means the loan is ready to go. Pre-qualified is more like an opinion of a loan officer and there's still work to be done before final approval.

http://www.nlpc.org/stories/2010/10/20/why-government-shouldnt-block-home-foreclosuresre

2010-10-20T13:33:00.000-06:00

Why Government Shouldn't Block Home Foreclosures

Submitted by Carl Horowitz on Wed, 10/20/2010 - 14:50

Email to friendPrinter-friendly If one word best summarizes the current housing market, "foreclosure" would be it. Despite record-low interest rates, American homeowners are losing their properties with greater frequency than at any time since the Great Depression. Yet as banks and other financial institutions are on track to seize 1.2 million homes by the end of this year, they are facing growing pressure to impose voluntary nationwide moratoria on foreclosure repossessions and sales. If they don't do the job themselves, say critics, government should do it. Several major lenders in fact have ceased property seizures in the wake of widespread revelations of foreclosures lacking proper documentation. The calls for action are understandable. Yet a moratorium, rather than restore integrity to our financial system, would further imperil it.
Few would deny that the foreclosure crisis is real and getting worse. Monthly data released last Thursday by the Irvine, Calif.-based RealtyTrac indicates that 102,134 bank repossessions of residential properties took place in September. This was the first time in which seizures exceeded 100,000, capping a Third Quarter that saw 288,345 repos. Overall foreclosure filings for the three-month period - repossessions, default notices and sale notices - were 930,437, up 4 percent from the Second Quarter. Put another way, 1 in 139 homeowners nationwide received a foreclosure filing notice during the Third Quarter; in Nevada, the national leader, the figure was 1 in 29. And this is in spite of a $75 billion federal initiative, Home Affordable Modification Program (HAMP), launched a year and a half ago by the Obama administration to prevent such an outcome.
Granted, this trend has natural limits. Barring a sharp rise in the unemployment rate - not out of the question - foreclosures eventually will drop to historic patterns. But this particular cycle presents a new challenge: Many foreclosed homes lack a marketable title. In other words, nobody knows for certain who owns them. It's a by-product of massive securitization, with now-collapsed secondary mortgage giants Fannie Mae and Freddie Mac serving as conduits between lenders and investors. Court documents in a number of states show that much of the paperwork transferring ownership of individual mortgages to investor-controlled financial pools has been lost, ignored or even forged. Of the nearly $11 trillion in outstanding mortgage debt in this country, about two-thirds has been transformed into tradable securities. Mortgage securitization is a global phenomenon. Yet even if the problem were fully contained within the U.S., it still could prove overwhelming if title issues aren't resolved. "If the basic principles of property law have been violated here...it may be extremely difficult to fix," remarked an anonymous source connected to financial industry regulation.
This logjam of broken chains of title could prove calamitous for the housing market because distressed properties now account for roughly one in four home sales. Huge numbers of potential bank-owned homes for sale could be thrown into limbo. Roughly 5 million homes in this country currently are in some stage of the foreclosure process. Fully 600,000 seized homes haven't been placed up for sale yet, notes RealtyTrac. Even a temporary foreclosure freeze would cut deeply into sales next spring, the prime home buying season. And lenders would stand to lose tens of billions, if not hundreds of billions of dollars, over the long run. Banks, already having seen their stock prices sink, are preparing for the worst. JPMorgan Chase announced last Wednesday that it had set aside $1.3 billion in reserves for litigation.
Because foreclosure is a legal as well as financial process, it is time-consuming, especially in states requiring a court order for a lender to take possession. The mortgage meltdown merely has added to substantial waiting times. Whereas the process nationwide took on average 302 days to complete in 2005, it now takes 478 days. In Florida, a state requiring a court order, the average current waiting time is 573 days. It's almost axiomatic that the longer the wait, the more troubled homeowners will have an incentive to give the lender the keys or remain in their dwelling without making payments. This is especially true if the home is "underwater" i.e.; the outstanding mortgage balance exceeds the market value. Deutsche Bank this August released data projecting that 20 million U.S. homeowners will be in this situation by the end of 2011, up from around 14 million. Steep declines in house prices are a good indicator of the concentration of underwater homes. In Florida and California, the two leading foreclosure states in volume, average home prices dropped by more than 50 percent during 2007-09. Very few recent buyers in such states can expect to come out ahead if they are looking to sell today.
Mortgage lenders/servicers, aware time is money, know that the faster they can take possession of distressed properties, the faster they can place them on the market. Overeager lenders, by various accounts, unfortunately have taken legal shortcuts, rubber-stamping documents (‘robo-signatures') without bothering to review them. In states requiring court action, such as Florida, foreclosure cases are known colloquially as the 'rocket docket.' Lenders' outsourced legal help have dispensed with cases in almost assembly-line fashion. The Plantation, Fla.-based law firm of David J. Stern, for example, assigned a team of employees to handle 12,000 foreclosures for Fannie Mae, Freddie Mac and Citigroup, receiving $1,300 per unchallenged action. The firm is now under investigation by Florida authorities for potential fraud. Tammy Lou Kapusta, the senior paralegal in charge of the operation, admitted in a September 22 deposition: "The girls would come out on the floor not knowing what they were doing. Mortgages would get placed in different files. They would get thrown out. There was no real organization when it came to the original documents." Some employees of various Florida mortgage processors have admitted in testimony that they did not know what a mortgage was, couldn't define "affidavit," and knew they were lying when they signed foreclosure-related documents.
Paperwork shoddiness has triggered a wave of litigation nationwide. Various individual and class-action homeowner suits are claiming that mortgage lenders and servicing firms have used phony documents to execute foreclosures. In December 2009, an employee of GMAC Mortgage (Ally Financial Inc.) stated in a deposition that his team signed about 10,000 documents a month without determining their accuracy. And a lawsuit filed in Louisville federal court on behalf of Kentucky homeowners alleges that the Mortgage Electronic Registration Systems (MERS), a Reston, Va.-based intra-bank mortgage transfer service, conspired to create false documentation.
The clouding of title to properties could clog the courts for years to come. "This is going to become a hydra," said Peter Henning, a professor at Wayne State Law School in Detroit. "You've got so many potential avenues of liability. You don't even know the parameters of this yet." Likewise, Richard Kessler, a Sarasota, Fla. attorney, states: "Defective documentation has created millions of blighted titles that will plague the nation for the next decade." Kessler conducted his own survey revealing errors committed in about three-fourths of all foreclosure-related court filings. Global securitization of mortgage finance has muddied the chain of title to possibly millions of American homes. The resultant lawsuits could involve countless homeowners, investors, title insurers, lenders and government agencies.
In the face of such a scenario, some lending institutions have backtracked. Bank of America early this month suspended tens of thousands of foreclosure sales in the 23 states requiring court approval. Ally Financial and JPMorgan Chase soon imposed foreclosure suspensions of their own in these states. On October 8, Bank of America extended its moratorium to all 50 states and the District of Columbia; Ally Financial, JPMorgan Chase and PNC Financial Services soon joined. But on Monday, October 18, Bank of America, servicer for about one in five U.S. home mortgages, reversed course, announcing it would resume foreclosures in the 23 states requiring judicial approval. Company CEO Brian Moynihan is trying to calm nerves. "We haven't found any foreclosure problems," he earlier had said at a news conference. "What we're trying to do is clear the air and say we'll go back and check our work one more time."
He hasn't found much sympathy among government officials. Senate Majority Leader Harry Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif., each have called upon lenders to freeze foreclosure actions in all 50 states until they can sort things out. Rep. Edolphus Towns, D-N.Y., chairman of the House Committee on Oversight and Government Reform, has made a similar demand. Senate Banking Committee Chairman Christopher Dodd, D-Conn., has announced he will hold hearings starting on November 16. President Obama on October 7 vetoed a bill sponsored by Robert Aderholt, R-Ala., requiring local courts to accept notarized interstate foreclosure documents. Federal Housing Administration (FHA) Commissioner David Stevens has asked agency-approved mortgage servicers to conduct immediate audits of all foreclosure operations. Attorneys general from all 50 states, though stopping short of calling for a moratorium, have launched a joint investigation into document fraud. And the Federal Housing Finance Agency, chief regulator for the mortgage industry, while announcing foreclosures can continue, are calling upon lenders to fix the document morass immediately.
Several nonprofit organizations also are pressing for a moratorium. Representatives from the NAACP, the National Council of La Raza and other civil rights groups joined union spokesmen at an October 7 press conference to demand action. "If we don't take drastic measures now, we can expect millions of additional foreclosures in the coming years, with a disproportionate number of them involving Latino and African-American families," said Wade Henderson, president of the Leadership Conference on Civil and Human Rights. There is a certain irony in such words. It was aggressive pressure by organizations such as his that proved instrumental in persuading lenders to expand mortgage credit availability to minority borrowers who couldn't afford it.
There can be little doubt that millions of homeowners are in way over their heads or that many mortgage lenders, inundated by paperwork, have valued speed over accuracy during the foreclosure process. The calls for a moratorium are understandable. Defective title chains serve to depress the entire housing market. Buyers may well pull out of ongoing deals. "All the buyers are scared to buy," recently observed Fort Myers, Fla. real estate agent George Messeha. But a moratorium would create far more problems than it would solve. This approach should be avoided for several reasons.
First, a foreclosure ban effectively would sever legal obligations between borrower and lender, providing distressed borrowers with the equivalent of amnesty. Borrowers, realizing the lack of negative consequences, would have more reason than ever to avoid making payments. A moratorium thus would constitute a huge subsidy from the honest to the dishonest - and expand the ranks of the latter. Even if "temporary," such a move would diminish the sanctity of contracts. Pending business deals, housing-related or not, could be shelved. A moratorium would undermine the integrity of rule of law, without which markets cannot function.
Second, a moratorium will disrupt financial markets, maintaining the imbalance between supply and demand. As mortgages more than ever are packaged into marketable securities - that's what triggered the financial meltdown in the first place - there will be a capital flight from housing, making funds for purchase, construction and renovation more difficult to obtain. Institutional investors such as pension, insurance, equity and hedge funds may avoid the housing market altogether. Any number of them may demand compensation for losses. Some already have taken action. A group of institutional bond holders this Monday wrote a letter to Bank of New York Mellon Corp. and Bank of America, citing BoA's "failure to observe and perform, in material respects" its role as servicer for 115 separate bond transactions. The group holds a combined $16.5 billion in outstanding mortgage-backed securities. And last Friday, JPMorgan Chase bond analysts estimated that future losses from loan repurchases failing to meet seller promises could reach anywhere from $55 billion to $120 billion. Preventing primary lenders from foreclosing will exacerbate this problem because it would fail to address the fact that people would continue to live in homes they can't afford.
Third, a foreclosure ban would hasten the decline of neighborhoods wracked by foreclosure. Housing industry columnist Kenneth Harney recently explained: "(A)lthough you might not be delinquent on your mortgage, the bank-owned house down the street that hasn't gone to foreclosure sale - and for months - might not be resold for an extended period to new owners who would make needed repairs and capital improvements. If the house becomes a long-term eyesore, it could negatively affect neighborhood property values." Now foreclosures do adversely affect surrounding property values. Research by Dan Immergluck (Georgia Tech) and Geoff Smith (Woodstock Institute); Robert Cotterman (U.S. Department of Housing and Urban Development); and University of Texas at Dallas economists Tammy Leonard and James Murdoch has demonstrated as much. But taking no action would be a far worse alternative. Foreclosure is a formality. It is an effect as well as a cause of local decay. And large numbers of people moving in who can't afford even to pay off a mortgage, much maintain their properties up to housing code standards, is the catalyst for decay. Property value declines, while almost inevitable, at least can be contained where foreclosure is swift and certain.
Fourth, a ban would invite greater federal intrusion in the housing market -as if enough intrusion hasn't taken place already. For the first half of 2010, 89 percent of home mortgages were insured or purchased by Fannie Mae, Freddie Mac, FHA and the Department of Veterans Affairs, notes industry periodical Inside Mortgage Finance. That's up from 30 percent in 2006. Several months ago the Federal Reserve System completed a first-ever purchase of mortgage-backed securities - $1.25 trillion worth - to prop up house prices. Government displacement of the market may well be the unstated purpose of a foreclosure freeze. Advocates of such a strategy know that if properties can't be put back on the market, they are unlikely to generate mortgage payments, even if occupied. That gives lenders an extra incentive to dump this inventory onto public agencies, especially Fannie Mae and Freddie Mac, which were placed under federal conservatorship two years ago and have received at least $160 billion (so far) in taxpayer bailout funds. What do Fannie Mae and Freddie Mac have to lose by buying properties? If they lose money, they can be compensated, if not by the lenders, then by the government. They have been virtually the only companies willing to buy distressed mortgages from lenders during the current crisis.
The foreclosure meltdown is a product of enthusiasm for promoting homeownership and securitizing high-risk mortgages. The underlying source of the crisis is the false idea that Americans have a right to become homeowners, even if lacking in creditworthiness. Get set for a replication of the crisis, too, once the provisions of the Dodd-Frank financial reform legislation fully kick in. The law's new Consumer Financial Protection Bureau, informally headed by Harvard law professor-turned-populist warrior Elizabeth Warren, is not likely to be impressed by mortgage industry pleading. And the law contains a host of affirmative action mandates for mortgage lending. Since blacks and Hispanics long have exhibited significantly higher rates of default and foreclosure than whites, civil rights groups will seize upon any racial disparities as a pretext to step up pressure on lenders, Congress and regulatory agencies to keep the money flowing to favored constituencies.
The federal government and the states by all means should investigate foreclosure fraud, recklessness and incompetence. There is ample evidence that mortgage lenders, deluged by paperwork, have been conducting foreclosures without due diligence. And if individual homeowners have been falsely evicted from their homes, they should have full recourse to sue. The real estate title industry, mired in practices dating back more than a century, could use some updating. But barring foreclosures would produce far more harm than good. It would remove millions of homes currently or potentially in foreclosure from market transactions, drive up market prices generally, and enable people who haven't made a mortgage payment in months, even years, to continue living as freeloaders. A mortgage, in the end, is a contract. Eliminating liability for upholding a contract is the antithesis of sound law and sound economics.

http://seattletimes.nwsource.com/html/opinion/2013203972_guest20fullencamp.html

2010-10-19T22:56:00.002-06:00

The Fed needs to soup up new stimulus package

The Federal Reserve will soon unveil its new approach to economic stimulus. If the Fed is serious about revving up job creation, guest columnist Connel Fullenkamp suggests the agency find ways to stabilize the still-fragile housing market

By Connel Fullenkamp

Special to The Times

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FOR the past few weeks, the Federal Reserve system has been acting like a car company about to unveil its latest model. Public remarks from several Fed officials have built up the expectation that a new stimulus called QE2 — short for Quantitative Easing, Mark 2 — will be introduced soon.

But in the best tradition of Detroit, the details about QE2 are being kept secret. What does the QE2 look like? Will it have the power to pull our economy out of this miserable slump and get it up to job-creation speed? We won't know the answers until early November, when the Open Market Committee is expected to launch QE2.

Unfortunately, what we do know suggests QE2 will be the same kind of underpowered, undependable stimulus model that Washington has been producing for several years now. If the Fed sticks to its current design, QE2 will be a lemon.

For one thing, it will have too small of an engine. The plan for QE2 appears to be to use newly printed money to buy $100 billion of bonds at a time on the bond market. But these purchases are likely to be too small to budge the economy. Remember that QE1 had to purchase more than $1.2 trillion of securities to prevent the economy from going into free-fall.

The bigger problem with QE2, however, is its lousy transmission. The Fed expects that quantitative easing will drive economic growth in the usual way: banks will end up with more cash on hand, which they will then lend out to consumers who will buy cars and houses, and to firms who will buy machines and hire more workers.

But these days, nobody wants to borrow! Households are still up to their ears in debt, and firms can't justify expanding their operations in this uncertain environment. And banks don't want to lend anyway, since their wounds from the subprime crisis are not healing quickly at all.

So if the Fed dumps hundreds of billions of dollars into the bond market, where will it all go? Most likely, it will pile up back inside the Fed in the form of bank reserve deposits, which is what's happened with much of the money from QE1. Or it could end up in the hands of the few players who would like to borrow money these days, such as hedge-fund operators who could use it to help push gold prices higher and the dollar lower. No thanks.

If the Fed really wants to wow us with daring design and unexpected power, it should produce a hybrid — a plan that uses monetary policy to do the one thing the Treasury could have done, but has been afraid to do — and this is to bail out homeowners. Mounting evidence suggests the economy won't get moving again until the housing market stabilizes.

More than one quarter of homeowners owe more on their loans than their homes are worth, and millions more face monthly payments so high that they are unsustainable. The federal government has repeatedly promised help and then botched these relief efforts, never actually doing the one thing that underwater homeowners need them to do — reduce the amount they owe.

And now we are finding out that the foreclosure process could drag on for years before these homes are repossessed and resold.

What the Fed should do is use the housing market to drive the stimulus. Within a few months, the Fed could stabilize the housing market simply by paying down millions of underwater mortgages so families owe less than the value of their homes again. This could be paired with a program to enable these homeowners to refinance at far better terms than they currently face.

If millions of struggling families suddenly had manageable mortgages, they could look forward to the future again and resume spending. And keeping additional foreclosed homes from the housing market would allow home prices to stabilize. Only then can a true recovery get under way.

Yes, this would be a bailout for homeowners. But at this point, who are we kidding about the need to set a good example? If the Fed really wants to roll out QE2, then it should give us something that will get us from point A, 9.6 percent unemployment and no hope, to point B, a growing, job-creating economy. Then we can talk about next year's model.

Connel Fullenkamp is an economics professor at Duke University.

http://www.prisonplanet.com/realtytrac-reports-q3-foreclosures-hit-all-time-record-just-in-time-for-the-plunge.html

2010-10-14T10:14:00.000-06:00

RealtyTrac Reports Q3 Foreclosures Hit All Time Record… Just In Time For The Plunge

Tyler Durden
Zero HedgeOct 14, 2010
Looks like someone may have had a little advance notice on October’s foreclosure semi-moratorium festivities. According to RealtyTrac, September foreclosures marked a 5 month high of 347,420, jumping 3% from the previous month and 1% from September 2009, even as the 3rd quarters marked the highest foreclosure activity on record. For the first time in history, bank repossessions (REOs) surpassed 100K, hitting 102,134. Providing some much needed color on what is actually happening in the foreclosure market, James Saccio, CEO of RealtyTrac said: “Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months. We expect to see a dip in those bank repossessions — and possibly earlier stages of the foreclosure process — in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks.” And plunge, foreclosure activity will: the 24 judicial foreclosure states most affected by the foreclosure documentation issue accounted for 40 percent of all foreclosure activity in the third quarter and 36 percent of bank repossessions, or REOs. And the worst part is precisely what Jim Cramer thought was going to represent a boost to home prices, confirming just how little the man understand basic market principles: “If the lenders can resolve the documentation issue quickly, then we would expect the temporary lull in foreclosure activity to be followed by a parallel spike in activity as many of the delayed foreclosures move forward in the foreclosure process. However, if the documentation issue cannot be quickly resolved and expands to more lenders we could see a chilling effect on the overall housing market as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows — causing more uncertainty about home prices.” In other words: a complete housing market collapse.
The chart below summarizes the monthly foreclosure activity by type (NOD + LIS, NTS+NFS, and REOs):

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Some more details from RealtyTrac:

Foreclosure Activity by Type
During the quarter a total of 269,647 properties received default notices (Notices of Default or Lis Pendens), a decrease of 1 percent from the previous quarter and a decrease of 21 percent from the third quarter of 2009, when default notices peaked at more than 342,000.
Foreclosure auctions were scheduled for the first time on a total of 372,445 properties during the quarter, the highest quarterly total for scheduled auctions in the history of the report. Scheduled auctions increased 5 percent from the previous quarter and were up 4 percent from the third quarter of 2009.
Bank repossessions (REOs) also hit a record high for the report in the third quarter, with a total of 288,345 properties repossessed by the lender during the quarter — an increase of 7 percent from the previous quarter and an increase of 22 percent from the third quarter of 2009.
Nevada, Arizona, Florida post top state foreclosure rates in third quarter
As it has for the past 15 quarters, Nevada continued to document the nation’s highest state foreclosure rate in the third quarter of 2010 despite a year-over-year decline in foreclosure activity. One in every 29 Nevada housing units received a foreclosure filing during the quarter, almost five times the national average. Nevada foreclosure activity increased nearly 1 percent from the previous quarter but was down nearly 20 percent from the third quarter of 2009.
Arizona posted the nation’s second highest state foreclosure rate for the fifth consecutive quarter, with one in every 55 housing units receiving a foreclosure filing, and Florida posted the nation’s third highest state foreclosure rate for the fourth consecutive quarter, with one in every 56 housing units receiving a foreclosure filing.
With one in every 70 housing units receiving a foreclosure filing during the third quarter, California documented the nation’s fourth highest foreclosure rate, followed by Idaho, with one in every 86 housing units receiving a foreclosure filing during the quarter. A total of 7,424 Idaho housing units received a foreclosure filing during the quarter, an increase of nearly 20 percent from the previous quarter and an increase of nearly 14 percent from the third quarter of 2009.
Other states with foreclosure rates ranking among the top 10 in the third quarter were Utah, Georgia, Michigan, Illinois and Hawaii.
Five states account for more than 50 percent of nation’s third quarter total
California alone accounted for 21 percent of the nation’s total foreclosure activity in the third quarter, with 191,016 properties receiving a foreclosure notice — the nation’s largest foreclosure activity total. California foreclosure activity decreased nearly 1 percent from the previous quarter and was down nearly 24 percent from the third quarter of 2009.
Florida foreclosure activity increased 12 percent from the previous quarter and was flat from a year ago, giving the state the second largest foreclosure activity total, with 157,026 properties receiving a foreclosure filing.
With 49,103 properties receiving a foreclosure filing in the third quarter, Arizona posted the nation’s third largest state foreclosure activity total. Arizona foreclosure activity increased nearly 8 percent from the previous quarter but was down 2 percent from the third quarter of 2009.
Illinois posted the nation’s fourth largest foreclosure activity total, with 47,802 properties receiving foreclosure filings, and Michigan posted the nation’s fifth largest foreclosure activity total, with 46,100 properties receiving foreclosure filings. Foreclosure activity in both Illinois and Michigan increased on a quarterly and annual basis in the third quarter.
Other states with foreclosure activity totals among the nation’s 10 highest were Georgia (41,231), Nevada (38,429), Ohio (36,677), Texas (34,187) and Washington (17,670)

And just like an inverse cash for clunkers, look for the mid-November update on October numbers to be a 50%+ plunge in numbers, especially in the Notice of Trustee and Foreclosure Sale categories.

http://chronicle.augusta.com/news/metro/2010-10-03/repossessing-vehicles-may-be-getting-riskier

2010-10-04T10:12:00.003-06:00

Repossessing vehicles may be getting riskier

Agents stay busy in sour economy

By Bianca Cain

Staff Writer

Sunday, Oct. 3, 2010

Recovery agent Ben Newsome said his job has become more dangerous since Operation Repo hit truTV.

Corey Perrine/Staff

Mickey Koelling says car repossession agents must follow the rules, but they often meet with threats or actual violence. He says he was hit in the head with a chain during one encounter.

"It's awful," he said of the show. "It's going to get somebody killed. It didn't get me killed, but it got me 15 stitches in the head."

The show follows a group of repo men who kick, push, scream, fight and pepper-spray people when retrieving their vehicles.

The show has taught car owners to expect violence.

At the request of the lien holder, Mickey Koelling, of Professional Auto Recovery in Augusta, was sent to Columbia to discuss payment arrangements with a debtor. But she refused to open the door for fear she would be thrown to the ground and pepper-sprayed.

On another job, a group of young men told Koelling they had seen the show and were prepared to fight for their vehicle.
But the truth is, repossession isn't like that. Recovery agents, just like everyone else, must obey laws.

Koelling said people resist all the time but agents don't respond with force.

For example, he said, several repo companies have attempted to repossess a North Carolina man's Mercedes. But when he's sleeping in it with a shotgun, there isn't much anyone can do.
Newsome, of American Recovery, said he has seen snakes and dogs left in cars as deterrents.
That's considered mild.
Every repo man has tales about really dangerous jobs.
Scouting for a car on Bolt Avenue in June, Newsome's personal vehicle was shot 17 times -- shattering back and front windows, flattening three tires and damaging his tool box.
The recovery agent said investigators believe the shooting occurred because he was in someone else's territory.
"Technically I could have repoed the car while I was there. I had the key, but I probably would have been dead," Newsome said.
As for the 15 stitches, they were required after he was struck on the head with a bottle.
Koelling, who has repossessed vehicles in several states, said he got his first piercing when he was hit with a 2-by-4 and a 16-penny nail went through his tongue.
Another time, he was hit in the head with a chain.
In August, a woman backed into him while attempting to make a getaway.
Koelling said he wasn't injured, so he didn't press charges. Everybody has desperate times, he said.
Both Koelling and Newsome said being held at gunpoint isn't uncommon. That's why vehicles are often repossessed at night, they explained.
"It usually takes 30 seconds to a minute-and-a-half to get (the vehicle) out of the yard," Koelling said. "By the time they get out of bed and put their clothes on, we're gone."

Although it can be dangerous, Newsome said, he continues because not every repossession is a life-or-death situation.

Many times the debtors are expecting a repossession and willingly hand over the keys, or have the vehicle in the driveway with the keys inside and license plate removed.

Lenders typically wait 90 days before calling for repossession.
With the recession, Koelling said, he's not only seeing more clients but a different kind of client.
To some, he's a familiar face, having repossessed several cars from them. Now he's meeting people who usually aren't late on their payments.

The good thing for recovery agents is that repossession is a recession-proof industry. The bad thing is the bad-guy image.

"It isn't my fault," Newsome said. "People are down on their luck, and there's a trail that gets to me. They take it out on me, but it isn't my fault."

The laws of repossession

WHERE: Recovery agents can remove a vehicle from private property as long as they don't commit breaking and entering or breach the peace.
WHEN: A request for foreclosure is usually submitted internally after two months of delinquent payments. By month three, a repossession company is usually searching for the vehicle.
NOTIFICATION: Lenders are not required to notify the debtor that the vehicle is to be repossessed.

DEFICIENCY: Lenders can seek deficiency payments if the sale of the vehicle does not cover the debt. Example: If a car with a balance of $15,000 is sold for $10,000 after being repossessed, the lender can seek $5,000 from the debtor.

POSSIBLE REPOSSESSION LOOMING: If you're delinquent, avoid complications by removing items in the vehicle. Debtors should contact the lender and explain the situation as soon as nonpayment begins. Banks will sometimes defer payments or work out a payment schedule.

Source: Mark A. Cleary, of Dunstan, Cleary and West LLP in Augusta

http://chicagoist.com/2010/09/26/repo_men_of_reality.php

2010-09-26T14:46:00.002-06:00

Repo Men of Reality

Photo By National Geographic

Unlike what’s shown on TV, the repo men of reality adhere to professional standards that don’t get into altercations with debtors and prefer stealth movements.

“Unfortunately these shows are on TV, people watch them and think this is repossession; it’s not, it doesn’t even come close to it,” said David Knopp, owner and operator of Republic Recovery Service.

The rogue fly by night operators who would share similar traits to the show “Operation Repo” are long gone. The Illinois Commerce Commission regulates the repossession business where it’s mandated to be licensed, insured and in compliance with the Illinois Vehicle Code for commercial relocation.

The commission regulates 61 repossession businesses within Cook, DuPage, Will, Kane and Winnebago counties, according to their 2008 annual report (pdf), the most recent available.

Knopp has been in repossession for 30 years experiencing all the trends. The job demands grueling hours where agents scour the area everyday extending beyond a 100-mile radius of their Blue Island location.

Assignments are issued from finance companies and pay is based off the recovery of collateral - cars are most commonly repossessed. The most popular cars repossessed are low end sedans. During the 90’s it was the Chevy Cavalier and now it’s the Pontiac G6.

Republic Recovery Service thrives from maintaining a consistent work load; between 25-30 cars are repossessed in a week. In 2009 at the height of the recession there were 30 assignments coming in daily, it has now subsided.

Chicagoist got to ride shotgun showing you what the real repossession world is like:

http://www.cbsatlanta.com/news/25133432/detail.html

2010-09-23T21:08:00.002-06:00

Company Promises Lower Mortgage Payments

Lands Clients In Foreclosure

A CBS Atlanta exclusive investigation is exposing a local company victimizing people who are trying to lower their home and car loans. We've spoken with dozens of families who say they've been devastated by one man whose profiting off their misfortune.

Fred Lee, an agent with Matrix Capital, has been served with a cease and desist order in Georgia and he is under investigation by the Dekalb County Police. But you'd never know it. His business is booming and the number of victims is growing.

"It could be any minute, any first Tuesday. Every first Tuesday I am waiting to see if my name is one the foreclosure list," Val Littleton told us.

Littleton is just one of the people living the same nightmare we were told time and time again.

"He said, ‘I got you, Val I got you.’ He got me in foreclosure," she warned.

"He should be punished for the wrong things that he has done to people," James McClendon agreed.

"If it happens, I lose my house, I have nowhere to go," Yvette Smith told us.

Lee is a self-proclaimed multi-millionaire who lives in a 6 million dollar home in one of Atlanta's most exclusive communities; he has several expensive cars, and a luxurious life almost anyone would envy. In 2006 he says he took home 11 million dollars.

But some people warn his lifestyle has been fed off the misery of others…

"I'm in foreclosure," Yvette Smith said.

Lee and his company, Matrix Capital, sell people the promise of a loan modification for $15-hundred dollars up front. He says he'll get you a lower interest rate, and while he's negotiating, you don't have to make a payment. You can live mortgage free. And people have believed him.

He holds packed meetings across the southeast, luring in new clients.

"Doesn't it make sense go into modification and have no payments during that process?" Lee said in his seminar.

It sounds good, but there's the catch. What he doesn't tell clients is as part of his process, after you don't make the payments, the bank may foreclose on your home. And you may have to file for bankruptcy to save it.

Littleton put her home loan and two car loans in Lee's hands looking for a better rate. She had no idea what she was in store for. Her house is now in foreclosure and she had to hide her car to keep it from being repossessed.

"I said ‘Fred, you knew we wouldn't have done it. And you're pockets wouldn't have been $200,000 richer each week,’" Littleton continued.

So we approached Lee to ask the tough questions about his loan modification process.

"So you financial advice is don't make the payment?" Investigative Reporter Wendy Saltzman asked.

"No stop, stop, stop," Lee said.

"And then the banks threaten to foreclose on your place, and that's how you get them to modify your loan?" Saltzman questioned.

"Ma'am. me and you both know what I just said," Lee Replied. "Studies have shown that most banks won't start the modification process until you are 2 months behind."

But his victims say they were never told their homes might go into foreclosure. And no one we spoke with had a successful modification through Lee.

"You are going to get all the collections, you are going to get all the ugly calls," Lee told us. "You might even get defaulted on."

The police are also now investigating Lee.

We'll tell you more about their investigation Friday night at 11.

http://technorati.com/business/finance/article/banks-bailout-stings-unemployed/#comments

2010-09-21T21:49:00.002-06:00

Banks Bailout Stings Unemployed

Author: Tech Michael
Published: September 21, 2010 at 6:11 pm

A techie lost his job during the 2008 downsizing and tried to renegotiate with his banks on his car loan. Denied! He sold everything he had to keep making the payments since his unemployment ran out last April. Friday he was notified he qualified for the new Federal extension so he could again buy food at the store and pay his bills and make up at least one of his two payments owed.

This morning he was visited by the repo man. Bam! Chase Bank received $25 billion in the bank bailouts and they repossessed the man's car being 52 days late on the first payment and not even 30 days on the second. He called the bank and tried to get them to wait until his unemployment check arrived, but Chase said, "Not my problem, surrender the vehicle."

Something doesn't sit right with me on this. Why is the government bailing out banks when the real tragedy is the millions of "We The People" who are losing our cars and homes due to corporate greed? The bailout should be coming to the people and not the corporations.

Watch "The Corporation," "Food, Inc.," "Crude Awakening," "Hacking Democracy" and "The Union: Business Behind Getting High" and more that demonstrate how private corporate and big money interests are getting preferential treatment over "We The People" of these United States of America. Get active in your government and express that it is not laws and legislation that we need, but a reality check on what matters more than money--people matter, money doesn't.

Hearing someone say, "I'll be dead before that happens" or "It's not my problem" can really turn a stomach foul. Think about your grandchildren's grandchildren and what they will inherit. Do you care about the future of our Spaceship Earth?

Greed is a sin. Turn away from sin.

http://www.cnbc.com/id/39192246/

2010-09-16T09:22:00.001-06:00

http://www.ksl.com/?nid=148&sid=12447945

2010-09-16T09:11:00.002-06:00

Utah remains in top 10 states for foreclosures

September 16th, 2010 @ 8:00am

SALT LAKE CITY -- The number of homes lost to foreclosure nationwide jumped nearly 4 percent in August. Utah is still in the top 10 for foreclosures, and the experts say the situation is likely to get worse before it gets better.

US homes lost to foreclosure up 25 pct on year
Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The numbers from RealtyTrac, Inc. show there were more repossessed homes in August than in any other month since the mortgage crisis began three years ago. The report shows 95,364 homes were foreclosed -- that's up 25 percent from August 2009.

There is some good news. The number of properties entering foreclosure actually slowed for the seventh month in a row. Experts say that is due to lenders allowing borrowers who miss their payments to stay in their homes longer.

Highest foreclosure rates

Nevada
Florida
Arizona
California
Idaho
Utah
Georgia
Michigan
Illinois
Hawaii

Rick Sharga, RealtyTrac senior vice president, says the number of foreclosures may continue to increase before the economy stabilizes. He predicts at best we'll see another record-level year of foreclosures in 2011 before the numbers begin to improve.

In Utah, one in every 230 housing units received a foreclosure filing in August. That's slightly worse than the one in 242 homes foreclosed the previous month.
More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year.
Nevada posted the highest foreclosure rate last month, with one in every 84 households receiving a foreclosure notice.

http://www.wpri.com/dpp/news/12_for_action/call12-car-loan-modifications-buyer-beware

2010-09-14T11:44:00.000-06:00

Buyer beware for car loan modifications

Companies prey on fear of repossession

Updated: Tuesday, 14 Sep 2010, 2:55 AM EDT
Published : Tuesday, 14 Sep 2010, 2:52 AM EDT

Bill Tomison
with reporting by Susan Hogan

PROVIDENCE, R.I. (WPRI) - Could you deal without your car? If you're having trouble making payments on your car loan, beware if a company comes calling, offering to modify your car loan -- many of these companies are simply not keeping their promises, and stranding drivers with worse debt.
Paula Flemming of the Better Business Bureau tipped off Call 12 For Action to this unscrupulous practice. Auto loan modification companies are following in the footsteps of mortgage modification companies -- targeting struggling families just trying to keep their heads above water.
Flemming said there's been an increase in cars being repossessed due to high unemployment in Rhode Island and around the country. Last year, 1.9 million cars were repoed.
Crooked companies are preying on the fear of repo. A family or individual might get a phone call from a company offering to lower their payments, and "they quickly act," said Flemming.
But if you act before researching that loan modification company, you could find yourself in even bigger trouble -- like a driver given the wrong directions. Some of these companies, said Flemming, don't just fall short on their promises -- they might not even modify the loan at all!
If you're having a hard time making payments, first ask your lender to adjust your payment plan. If you do want to go to a new company, at least do your research, and check the company's reliability report with the BBB.
And always beware of advance fees; it's a red flag, even if the company says they'll give you a money back guarantee.
"You could have initially dealt with your lender and not pay any fees," advises Flemming. "[The crooked loan companies] are digging you further into a hole."
The final common sense check: get everything in writing. Ask the company's rep to send you documentation, a copy of the loan agreement or contract. Make sure it discloses the services they will provide and their terms, including any refund policies.

http://www.siskiyoudaily.com/news/x907387807/Many-questions-arise-over-YAC-incident

2010-09-13T16:31:00.002-06:00

Many questions arise over YAC incident.Zoom Photos. Jamie Gentner.The Yreka Auto Center Service and Wash center has been closed since cars were taken from the car lot on Aug. 26. Owner Steve Long said the decision to keep the businesses closed came when he was told any cars he tried to sell on the lot would be taken, and he didn’t want to take any chances of anything happening at the other two YAC branches.

Yreka ApartmentsYreka AttorneysYreka Auto DealersYreka Auto PartsYreka Auto RepairYreka Beauty SalonsYreka Car RentalYreka DentistsYreka DoctorsYreka FlowersYreka HotelsYreka InsuranceYreka LoansYreka MortgagesYreka MoversYreka PizzaYreka RealtorsYreka RestaurantsYreka StorageYreka Tax PreparationYreka Travel.By Jamie Gentner

Siskiyou Daily News

Posted Sep 13, 2010 @ 08:39 AM

Yreka, Calif. — It’s been almost three weeks since cars disappeared from the Yreka Auto Center lot on Main Street in Yreka. Nineteen days after the event, there are still questions about what happened and different sides of the story to be heard.

Yreka Auto Center

When YAC owner Steve Long showed up for work Thursday, Aug. 26, almost every car that had been on the lot was gone and the door to the office was ajar, he said.

Long called the Yreka Police Department to report the cars stolen. He received a call back informing him that the cars had been repossessed, Long said.

He had received an e-mail the Monday before, but he didn’t get around to reading it until days later. The e-mail was from Express Auto Funding, the bank from which YAC had borrowed money for several of the cars on the lot. The e-mail demanded payment of $346,000 on eight cars by Wednesday or Long would be put in default.

But Long wondered several things: how had the company gotten hold of the keys for the cars? And why had they taken almost every car on the lot – including some belonging to local residents that were on consignment or in for service?

Long said he was told that the local man who repossessed the cars for Express Auto Funding, Nolan Henry, had told police that Long had given him the keys for the cars the night before. But when he left at around 5:30 p.m. Wednesday, Long said, the keys were locked in the closet as usual. He also said a cleaning lady who left around 7 p.m. reported that the keys were in the closet – which is where all her supplies are kept – when she left.

“If I had handed him the keys Wednesday night, why did he come at 3 in the morning for the cars?” Long said. “And why would I have given him the keys to every car?”

The police had told Long that Henry had called around 3 a.m. Thursday morning to tell them he took the cars and would look into which cars he needed to return, Long said.

A police officer had been there that morning, Long said, and Henry wasn’t stopped.

In the days that followed, Long said he retained an attorney and had several meetings with YPD Chief Brian Bowles and Lt. Dave Gamache.

But the police wouldn’t take any stolen car reports, Long said, because they determined the case was civil and not criminal. Instead, Long and the individuals seeking their cars should get ahold of Henry directly, Long said he was told.

He discovered that the cars had been taken to a ranch in Montague before being shipped to Fresno and Bakersfield, Calif.

“There are people who have their titles but don’t have their cars anymore,” Long said. “I’m not concerned about the YAC cars; I’m concerned about the 18 cars that belong to our customers that were taken.”

While working to help those individuals figure out how to get their cars back, Long said he and his staff were also trying to regroup and figure out how to stay open.

“We were told if we put cars on the lot again, they would be taken,” Long said. “So we weren’t going to take any chances until we get this settled.”

So the lot and the service center and car wash across the street remained closed – though Long has remained at the lot to field questions.

Long said he knows of a few people who have received their car. But he was told the rest of the cars would be back Wednesday, and they weren’t.

“The District Attorney’s Office says the case is civil so they can’t issue warrants, and the police say it’s civil so they can’t arrest anyone,” Long said. “They say he isn’t ‘permanently depriving’ people of their cars.”

But Long said he questions whether the parties involved have something to do with why the police won’t take action.

“I feel like I’m in a different country. ... How this went down, how the police and district attorney won’t get involved – I don’t know how all this works, but it doesn’t smell right. It doesn’t feel right,” Long said. “The character of a vehicle doesn’t change whether it’s on my lot or at someone’s house. You can’t take someone’s car.”

Long said he has never seen a repossession handled like this in his 25 years in the car business. Had it been handled differently and had the police gotten more involved from the beginning, Long continued, three businesses would still be open.

“I don’t know how more to help my customers,” Long said. “Now I’ve got to figure out what, as a business, to do and where to go.”

Finance Company

Henry was contacted several times for comment, but Express Auto Funding would only issue a prepared statement.

In the statement received Friday, the company states that it made loans to Yreka Auto Center so it could buy cars to sell on its lot.

“Several months ago, Yreka Auto stopped making payments on these loans. Now it has been discovered that Yreka Auto is guilty of several serious violations of contract,” the statement reads. “In response, Express Auto Funding took lawful steps to obtain possession of certain Yreka Auto vehicles. ... Express Auto Funding regrets the harm done by Yreka Auto to Yreka customers.”

When contacted by the Daily News for further comment regarding repossession procedures, why a list was not used so only YAC cars were taken and why several individuals had not received their cars back 16 days later, Express Auto Director David Lachtman said the company had no further comment.

The police

Bowles said the YPD got more involved in this case than they would normally get involved in a civil case. All their information on the case has now been turned over to the district attorney.

He called the situation a “mess” and said his department has spent an “extensive amount of time” trying to solve the situation at a community level.

In contrast to Long’s statement, Bowles said anyone who has requested to make a report has been allowed to do so.

But it doesn’t appear Henry was stealing any vehicles.

“If he was stealing the vehicles, he wouldn’t call the police department. You have to have intent to permanently deprive,” Bowles said. “This was a creditor collecting assets from a business. ... He said he will release the vehicles he’s not supposed to have.”

With that in mind, Bowles said, he doesn’t want to make any false arrests.

“We don’t want to intrude on someone’s rights, but yet we want to protect potential victims,” Bowles said. “So we’re still continuing to help people get in contact with him.”

He has been told that all but a few cars have been returned to their owners, Bowles said. But there has been some questions about whether cars that were on the lot on consignment had been signed over to YAC, so there was an extensive effort to determine which cars belonged to whom.

A look at the consignment form sellers sign revealed there’s no act of signing over a title or rights to YAC.

The police have to look at the physical evidence available in a case, Bowles said.

A police officer was called out that morning, requested by Henry, to check the premises before he left, Bowles said. This is a common practice to ensure owners don’t try to pin damage on a repossessor, he said. And there was no physical evidence of forced entry at that time.

In addition, Bowles said, a look at the contract involved reveals that Express Auto has the authority to take assets if balances are unpaid.

“Can keys be considered an asset?” Bowles said.

He dismissed the idea that the police aren’t getting involved because of the parties involved.

“I was told when I took this job that I could arrest anyone who has committed a crime – it doesn’t matter if that means arresting the mayor, city council members, law officers,” he said. “Otherwise, I wouldn’t have taken this oath. My department knows that if you do the crime you do the time.”

But while there appears to be some bad business practices and some tricky situations in the mix, for now, there has been no determination that a crime has been committed, he said.

Bowles said that he, too, has not seen a case like this in 20 years.

He encouraged any individuals who have not received their car and who believe it to be stolen to file a report with the police department, and he said that it’s now just a matter of waiting to see what happens.

District attorney

District Attorney Kirk Andrus said his office has taken on the role of mediator in this case.

“There may be a criminal case some day, but knowing whose vehicles these are is a prerequisite to a criminal investigation,” Andrus said.

He said several people have come forward with proof of ownership for their vehicle and there has been an effort to return those vehicles.

Any vehicles that have not already been returned, Andrus said, are expected to be returned this week.

And to this point, the case is civil, Andrus said, because of intent.

“When you talk about criminal intent, if a person did something because they felt legally entitled to, it’s not a crime,” he said. “They might be wrong, and in that case it would be up to a civil court to determine who’s right and wrong. But it’s not a criminal matter when someone truly believes they are right. ... It does have to be reasonable, though.”

Andrus said he has no indication that YPD is not taking reports or is not getting involved when they should be.

“I have not noticed any amount of prejudging who is right and who is wrong or the police giving the benefit of the doubt to anybody,” he said. “People can feel confident that the Yreka Police Department has handled this the best they can.”

His department has not ruled out the possibility of a crime having been committed, Andrus said.

“What we’re doing right now is trying to solve problems and make people’s lives easier,” he said. “This dispute has interrupted people’s personal and business lives.”

Customer

One resident whose life has been affected is Mike Harris, who said his daughter’s car was on the lot for repairs when the cars were taken.

As of Thursday afternoon, he had not received the car and he had not been able to file a stolen vehicle report, he told the Daily News.

His finance company had called and told him he would have the car last week, Harris said. When he didn’t get it back, he said he talked to Henry, whom he said told him he didn’t know where his car is.

Andrus said his records indicate there are issues with that car, but there was no record of contact from Harris.

Andrus added that the promised return of cars is an important event in this case. Once that is done, or is not done, more will be known about how to proceed.

Copyright 2010 Siskiyou Daily News. Some rights reserved

http://www.reporternews.com/news/2010/sep/04/repo-man-a-people-person/

2010-09-04T22:59:00.000-06:00

Labor Day, repo man: He is a people person'

By Jaime Adame
Posted September 4, 2010 at 8:41 p.m.

Richmond Russell is a partner in Bulldog Recovery, a repossession company. [photocredit]Ronald W. Erdrich/Reporter-News[/photocredit]

With a .30-30 rifle pressed against his forehead, Richmond Russell knew just what to say. “Sir, I must be at the wrong house,” Russell recalled saying. After retreating from the doorway, Russell climbed into his tow truck and drove away.

But both men knew there had been no mistake. Russell was there for good reason, to repossess a vehicle on behalf of a creditor.

And Russell would not give up so easily. The knock had been a courtesy, to give the elderly man — born in the 1920s, as Russell recalled — a chance to retrieve any personal belongings; the vehicle was on the street.

“Seven to 10 seconds. I can be down the road,” said Russell, 32, chuckling at the memory of the confrontation in Brownwood.

After making the block, he returned and left with his prize in tow.

Ten years ago, Russell started working as a repo man in the Lubbock area.

“Just something to make a living,” he said.

He left the business for a couple of years but, for the past five years, he has been a partner in Bulldog Recovery with Lubbock resident Bill Johnson. Based in Abilene, Russell roams across the Big Country, picking up cars and trucks whose owners have been remiss in making payments.

“I’m a people person, for the most part,” said Russell.

He speaks at a rapid pace, and doesn’t seem quite relaxed even while seated in his recliner at home. The Bluetooth earpiece probably doesn’t help.

He has plenty to say about people, both good and bad.

There are the liars and the hiders, the fruit-throwers and the chaser-afterers. One guy in Brownwood ran after him in his boxers in 20-degree weather, Russell said. Twice he brings up the section of the Texas Penal Code that states it’s a felony to hide property on which there is a lien, depending on the property’s value.

On the other hand, people will sometimes offer to help him tow away their vehicles. He understands that people just get caught up in hard times

Ultimately, the truth is that those who cause problems “are few and far between,” he said.

Russell has his own style in dealing with the public.

“Politeness, right off the bat. Kill ’em with kindness,” he said. People sometimes “will swell up,” but usually do nothing more. Although he has called the police for help, “never one time have I gotten into a physical confrontation.”

About 50 percent of the time, things run smoothly. His client — usually a finance company, maybe a bank — offers a name and address. He drives there in his truck and hauls away the vehicle, no keys necessary.

The other 50 percent make life complicated. He said he spent $28,000 last year trying to locate debtors. If he has to drive to three or four locations, he’s wasted gas and lost money on the job, he said.

He covers a wide area, about a 100-mile range around Abilene.

“I have to go just that far to be able to make a living,” he said.

Work can be boom or bust, and Russell said he thinks he has a pretty good feel for at least some economic policy.

“Cash for Clunkers was the absolute worst thing for the economy and the absolute best thing for the repossession business,” he said, referring to a federally funded incentive program that encouraged consumers to buy new, more fuel-efficient cars.

Last summer, he brought in 75 cars a month, a pace that’s slowed this year.

All repo agents work to get pretty much the same clients, and a monthly “report card” listing the success rate for a repo company can be a factor in deciding who gets jobs.

“It’s a ruthless business to be in,” he concedes.

A cigarette dangles from his mouth, and his sunglasses remain propped on his shaved head.

“The American public lives beyond their means. That’s the American way,” Russell concludes. “We all do it. It’ll always be that way.”

http://www.cutimes.com/News/2010/8/Pages/NCUA-Warns-CUs-About-Perils-of-Indirect-Lending.aspx

2010-08-18T09:36:00.002-06:00

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NCUA Warns CUs About Perils of Indirect Lending 8/18/2010

By David Morrison

The NCUA wants credit unions to exercise significant care when making loans in partnership with third party vendors or organizations.

“NCUA examiners are reviewing Call Reports for increasing amounts of repossessed autos or increasing indirect lending delinquency and loan losses,” the agency wrote in an August letter to credit unions on the topic. “In addition to those obvious danger signs, examiners are also looking for other warning signs or red flags that may require a credit union to slow down indirect lending.”

Some of the red flags include having a high concentration of indirect loans to total loans or net worth without adequate controls in place; tying loan officer bonuses to indirect loan volume incentive programs and not performing adequate analysis of overall indirect loan portfolio performance.

“Credit unions should regularly test for compliance with the contract terms by comparing delinquency, loan losses, and rates of return to previous results and budget levels,” the agency instructed. “These statistics and those from the static loan pool analysis should be compiled for each vendor and the overall program. Credit unions should implement changes based on the analysis of the program and individual vendors participating in the program,” the NCUA added.

The NCUA wants credit unions to exercise significant care when making loans in partnership with third party vendors or organizations.

“NCUA examiners are reviewing Call Reports for increasing amounts of repossessed autos or increasing indirect lending delinquency and loan losses,” the agency wrote in an August letter to credit unions on the topic. “In addition to those obvious danger signs, examiners are also looking for other warning signs or red flags that may require a credit union to slow down indirect lending.”

Some of the red flags include having a high concentration of indirect loans to total loans or net worth without adequate controls in place; tying loan officer bonuses to indirect loan volume incentive programs and not performing adequate analysis of overall indirect loan portfolio performance.

“Credit unions should regularly test for compliance with the contract terms by comparing delinquency, loan losses, and rates of return to previous results and budget levels,” the agency instructed. “These statistics and those from the static loan pool analysis should be compiled for each vendor and the overall program. Credit unions should implement changes based on the analysis of the program and individual vendors participating in the program,” the NCUA added.

http://www.sltrib.com/sltrib/money/50125049-79/loans-auto-credit-loan.html.csp

2010-08-17T18:22:00.002-06:00

Consumers loans harder to come by, except those for autos

By LESLEY MITCHELL

The Salt Lake Tribune

Updated 1 hour ago Updated Aug 17, 2010 04:38PM

It’s more difficult — impossible for some — to get a home loan or refinance these days. Ditto for credit cards. And small business loans? Don’t even consider applying for one unless you have a financial house in order.

But auto loans? Not so much. Bad credit, bad credit — it seems like most people these days are still able to finance the purchase of an automobile.

“It’s amazing just how the auto loan industry has relaxed their lending standards, even in just the last 90 days,” said Al Bingham, the Utah author of The Road to 850,” a book about the nation’s credit scoring system.

The goal, of course, is to move cars off lots at a time when many consumers can’t — or don’t want to — make a major purchase.

That’s why General Motors recently agreed to purchase AmeriCredit, a provider of subprime loans made to borrowers with less than perfect credit. Analysts say the acquisition could boost the automaker’s sales by 10 percent to 20 percent a year by giving the carmaker broader control over auto-loan approvals, especially to those with less than good credit.

So why has subprime car lending continued long after subprime home loans have virtually disappeared amid the housing crisis?

For starters, auto loans to those with less than perfect credit don’t carry the risk to lenders than high-risk mortgages do. Customers pay exorbitant interest rates — in some cases pushing 30 percent — and cars can be repossessed fairly quickly and easily if borrowers stop paying. Seizing a home is a much more time-consuming and expensive process.

And many borrowers remain highly committed to their car loans and will stop paying on their credit cards and other debts — even on their mortgages — before they stop paying the loan that gives them a way to get to work or anywhere else the need to go.

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But there are signs of trouble in the auto lending industry. Auto loan defaults rose sharply in July by 16 percent from June, according to a report released last week by Standard & Poor’s and credit-reporting company Experian.

While mortgage loan and credit card default rates fell slightly, rates for second mortgages and auto loans rose. The default rate on auto loans in particular increased to 1.9 percent in July from 1.6 percent in June, reversing six months of declines.

“It may be an early warning sign, “ said David M. Blitzer, a Managing Director at Standard & Poor’s.

The problem for many car dealers right now, Bingham said, is that the people who can truly afford to buy a car right now don’t want to buy. Many people are holding on to cars longer and delaying vehicle purchases.

But there are a number of borrowers who need a car or want to buy one even if they aren’t in good shape financially.

Since the economy has tanked, the federal government has been pushing incentives for consumers to buy homes, cars and other items — and encouraging financial services companies to lend — in an effort to stimulate the economy.

But credit experts like Bingham aren’t sure that subprime auto loan ultimately are good for consumers — or the economy as a whole. “Is a 20 percent interest rate going to help someone, or make their financial situation worse?” he asks. Plus, a rash of auto-loan defaults down the line could hinder the nation’s economic recovery.

But Craig Bickmore of the New Car Dealers of Utah said it’s important to note that the car-loan industry didn’t bring on the financial crisis and that default rates on vehicle loans overall are much lower than default rates on other types of loans.

http://www.glendalenewspress.com/news/tn-gnp-autos-20100818,0,2410783.story

2010-08-17T14:12:00.001-06:00

Car dealers hanging on to improved sales figures

If anyone is pleased with the lukewarm national retail sales figures for July, it is probably auto dealers.

Car sales represent the brightest spot in the Department of Commerce figures released Aug. 13, which overall showed a 0.4% gain in retail and food spending over the previous month. But auto sales were up nearly 9% from July 2009 and 1.7% from June.

"It is better news," said Jeanne Brewer, owner of Acura of Glendale. "We're seeing a little increase over what we were doing last year. The good news is we're also starting to see a few more people out into the marketplace, making decisions to repair their vehicles."

At Star Auto Group on Brand Boulevard, sales of Mazdas were up 67% compared to the same period last year. Sales at the group's Ford unit were up at least 21%, said owner Steve Bussjaeger.

"We are selling more cars and trucks, no question," he said.

Buyers remain mileage-conscious, with makes such as the Ford Fusion and Focus leading the charge, he added.

But Bussjaeger saw reasons for caution, as well.

The relatively large increases in sales mask what was "a very deep low" last year.

"The auto sector probably got hit harder and were down further than everybody, so it doesn't surprise me that we are up," he said.

The Brand Boulevard of Cars is an especially important source of sales tax revenue for the city, so any recovery there would impact city coffers.

The uptick in sales was stronger earlier in 2010, with sales flattening out in summer. The Department of Commerce statistics show car sales up overall in July compared to June, but that was after a slowdown compared to May.

Comparisons to last year will grow tougher next month, when the federal cash-for-clunkers program was at full throttle.

Brewer and Bussjaeger said the business continues to experience a hangover from the credit crunch, with some car buyers returning autos to the lots to be repossessed by lenders.

"That never used to happen at all until about a year-and-a-half ago," Brewer said. "

Still, bright spots in the entertainment and film production industries in terms of job recovery has had a noticeable effect on business, she added.

"Fifty percent of our business comes from people in the entertainment industry, which creates a lot of jobs in our area," Brewer said. "A few more projects getting funded, and we're starting to see that population come back into the dealership, which has really been terrific."

http://www.commercialappeal.com/news/2010/aug/17/better-business-know-meaning-of-used-when-you-go/

2010-08-17T09:44:00.002-06:00

Better Business: Know meaning of 'used' when you go shopping

By Randy Hutchinson, Special to The Commercial Appeal

Memphis Commercial Appeal

"Used" seems like such a simple term, but buyers have a right to know exactly what it means. The Better Business Bureau has a Code of Advertising that defines variations of "used."

The code starts by stipulating that any product that was used previously should be described as such or in similar terms, such as "secondhand," "pre-owned" or "repossessed."

"Rebuilt" should only be used to describe a product that has been completely disassembled, reconstructed, repaired and refinished, including the replacement of parts.

If an item is advertised as "reconditioned," then it should have received such repairs, adjustments or finishing as were necessary to put it in satisfactory condition without completely rebuilding it.

"As is" means the buyer receives the product in the condition in which it is displayed at the place of sale. With few exceptions, the seller of an "as is" car will not be legally responsible for any repairs needed after you drive it off the lot. The BBB receives many complaints about cars sold "as is," so I'll share more advice about them at the end of this column.

The BBB Code of Advertising also covers items that aren't used, but are advertised as defective or discontinued. Merchandise placed on sale because it is defective or rejected by the manufacturer for falling below standards should be advertised by such terms as "second," "irregular" or "imperfect." Linens or clothing are often sold this way.

Items that are marked "discontinued" or "discontinued model" should be new merchandise that a manufacturer has stopped producing, or that the retail advertiser will discontinue offering after clearance of existing inventories.

Let's return to the subject of cars sold "as is." They can be good deals, but are a clear case of "let the buyer beware."

I read a complaint recently in which the buyer started having serious problems with the car after owning it for just a month (other complaints cite problems within days of the purchase). The brake lights didn't work, the tail pipe fell off, the hood bounced up and down, and the odometer was broken.

When he asked the dealer to make repairs, the response was, "Don't call me no more. The car is sold as is. All the cars on the lot have problems. That's why they are cheap."

Federal Trade Commission regulations require that a Buyers Guide describing any warranty be posted on every used car. If the car is sold "as is," a box labeled "As Is -- No Warranty" should be checked.

The BBB offers the following tips when buying a car "as is":

Lemon laws generally don't cover used cars, and there is no three-day right to cancel.

If the "As Is" box is checked but the dealer promises to make repairs to the vehicle or cancel the sale if you are not satisfied, make sure the promise is written on the Buyers Guide.

Have a trusted mechanic inspect the car.

Check out the dealer with the BBB.

Randy Hutchinson is the president and CEO of the Better Business Bureau of the Mid-South.

http://newsblaze.com/story/20100807152043j112.nb/topstory.html

2010-08-09T10:06:00.000-06:00

A Personal Tale of Murder, Depression and Deprivation in Flint, MI

diggBy John Danz Jr

Somehow, I'm still surprised to see Flint, MI in the headlines.

I moved away from my hometown of Flint just two months ago. It was the best move I ever made in my life. My mom decided to move back to Flint from Texas after three years because she missed her family and hated the fertile, full of opportunity economy of Texas. Trouble is, Flint is an abysmal cesspool financially and socially. She didn't think, and now she wonders how she'll get by without a job from week to week. I can't say I didn't warn her.

Let me put the job market of Flint in perspective for you in a personal manner: In eight months in Flint, my mom had one temporary job for three weeks. I never came close to finding a job. However, within ONE WEEK in my new hometown, I had two job interviews and a job. Call it chance, but I think that speaks volumes for not only Flint's depraved atmosphere, but my mom's foolishness.

Enough insipid tales about my life.

Thirteen stabbings and five deaths later, Flint has made CNN headlines again for its bleak, murderous stigma. To put this in non-boring mass media news terms, an idiot in Flint is acting like he's in distress, only to shank the Good Samaritans that attempt to help him.

What was once 235 acres of prosperity for Flint is now a barren wasteland.

I must say, this is more entertaining than the usual gang shootings. Hearing gunfire every other night for six years got boring, after all. One time, these Emmy award winners decided to entertain me in the neighbor's yard. Soon after, my dad soaked the house in gasoline, threw a match and swept us to a more docile city.

Yeah, I thought I was done talking about my own life, too.

Thirteen stabbings and five deaths later, Flint once again asserts itself as one of the worst places to live and the loud, proud anus of the state of Michigan. All that seems to be left of Flint are the scars in the Earth where automotive factories used to proudly roll out fresh new cars. My mom, grandfathers, grandmother on one side, aunt, uncle and father all made a living through General Motors and Delphi. My grandfather was once vice president for the Chrysler division of UAW. Today, all they have to show for their work are the ashes of the useless certificates they got for their 10-20 years of service resting comfortably in their respective fireplaces. They're still there, because their repossessed houses haven't been sold yet. That explains all of the boarded-up houses on the block I grew up on.

Nope, not done yet. Don't worry - my mom bought a repossessed house with the meager restitution she was given to quit GM. We found a former Fannie Mae executive living in the basement living off of the crumbs of a more prosperous yesteryear. Bitter crumbs, they are.

Thirteen stabbings and five deaths later, Flint now has the attention it needs from the media. Now, everyone can be reminded of how much of a fecal smear Flint has become. A fecal smear of which is becoming less and less conspicuous on the map by the year - but just as smelly. Good news, because it's the only media attention Flint will get until another second grader takes his mom's gun to school and shoots it up.

I finally understood how bad Flint was when I heard a friend of mine was starting a bullet casing collection - from his front yard. When I returned, I saw roaches and rats vacating the city with their belongings on their backs. Now-homeless retirees of GM return to the remains of the once-bustling GM plant to make-believe the tasks that once gave them and their children a future. If walls could talk, there would be a cacophony of screams permeating the dead air from the likes of crack houses, meth labs, condemned shacks and soon-to-be-demolished buildings.

Perhaps you read about the stabbings in Flint on CNN and it was your first time being exposed to the city of Flint. Hell of a first impression! Perhaps you said to yourself "Well, all of Michigan is screwed beyond belief thanks to the collapse of GM and the rest of the automakers." I defy you to take a twenty-year walk back in time and find a city in this state that has filled the toilet full of feces and traveled down the pipes into the deepest, darkest realm of the sewer faster than Flint. Detroit? Sure, but it's a big city. That's not fun, nor is it entertaining. They still have the Red Wings and Eminem. I doubt you'll see any of the few famous faces to come out of Flint "reppin'" any time soon.

Perhaps, like me, you call or once called Flint home and feel the same way I do, and wonder if things will ever change. I mean, come on, even Hiroshima was able to be rebuilt after they were decimated with an atomic bomb. The radiation killed off thousands over time, but at least they had pretty buildings! Flint needs more than simple restoration and urban development - it needs an extreme makeover that would make Ty Pennington run screaming. It needs a complete overhaul financially with competent leaders and minds who can set up the rebuilding process.

This just in - Flint and Michigan is essentially broke. Well, so much for that idea!

Then again, speaking of money, Flint could use what Kalamazoo got - a bunch of billionaires giving millions of dollars towards guaranteed scholarships to schools thanks to their lazy, unmotivated students adding up to a massive dropout rate. It was dubbed "The Kalamazoo Promise." Would Flint have too much pride to accept such a gift? Who knows.

I finally digress.

Thirteen stabbings and five deaths later, Flint still needs help. And thirteen stabbings and five deaths later, Flint still won't get the help it needs. Which means, that's thirteen stabbings and five deaths I'll just experience somewhere else in this depressing, depraved state.

Consumer Report: Carfax Scam

2010-08-09T10:02:00.000-06:00

KYW Newsradio

> Local News, > News, > Local News,> News,Business & Econ.

8/8/2010

11:41pm

by CBS3’s Jim Donovan for KYW Newsradio 1060

When Amanda Hanson needed a new car she headed straight to the Internet and found a web site for America auto sales.

It claimed to be a Carfax certified dealership with an extensive list of repossessed cars at outrageously low prices.

She settled on a 2006 Chevy Cobalt and wired a deposit of more than $2,000 to the site.

Hanson: “What assured me of their reliability was the Carfax logo.”

But unfortunately for Amanda, the web site was a scam.

She was left $2,000 poorer and without a car.

One red flag that something was fishy was with the web site because Carfax doesn’t certify dealerships.

Chris Basso is with Carfax:

“These are trusted companies that consumers rely on, and they’re playing off that trust to dupe unknowing consumers.”

RepoFinder.com

http://repofinder.com - http://www.chinookobserver.com/news/local/foreclosures-hang-over-pacific-county/article_c4a84218-4462-11e0-980b-001cc4c03286.html#user-comment-area

http://repofinder.com - http://www.ivpressonline.com/news/ivp-news-repo-business-is-steady-20110222,0,6913576.story

http://repofinder.com - http://money.cnn.com/2011/02/01/news/companies/repo_spike_mtv/

http://www.repofinder.com - http://www.bakersfield.com/news/local/x864760413/Wholesale-car-auction-coming-to-Bakersfield

http://www.repofinder.com

http://www.repofinder.com

http://www.globe-democrat.com/news/2010/dec/20/bbb-study-shows-some-used-car-dealers-taking-advan/

http://www.wnep.com/news/countybycounty/wnep-lacka-scr-theft-kevin-prasi,0,7771735.story

http://www.wanganuichronicle.co.nz/local/news/car-buyers-loss-proves-harsh-lesson/3933775/

http://www.thenational.ae/news/uae-news/the-winning-bid-takes-the-wheels-in-dubai

http://www.bayofplentytimes.co.nz/local/news/repossessions-spark-car-buying-warning/3932667/

http://www.herald.ie/national-news/city-news/nows-your-chance-to-get-a-bargain-luxury-sports-car-2445235.html

http://money.cnn.com/2010/11/29/autos/americas_car_Mart.fortune/

How To Buy A Repo Vehicle

http://wcfcourier.com/news/local/article_0d0c4bec-aa79-5acf-b8a4-8eeec1cceb1c.html

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http://www.ksl.com/?nid=148&sid=12992514

http://www.marketwatch.com/story/new-normal-in-housing-and-manufacturing-2010-10-22?reflink=MW_news_stmp

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http://money.cnn.com/2010/10/21/real_estate/buying_a_foreclosure/index.htm

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http://www.nlpc.org/stories/2010/10/20/why-government-shouldnt-block-home-foreclosuresre

Why Government Shouldn't Block Home Foreclosures

http://seattletimes.nwsource.com/html/opinion/2013203972_guest20fullencamp.html

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http://www.prisonplanet.com/realtytrac-reports-q3-foreclosures-hit-all-time-record-just-in-time-for-the-plunge.html

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http://chronicle.augusta.com/news/metro/2010-10-03/repossessing-vehicles-may-be-getting-riskier

Repossessing vehicles may be getting riskier

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http://chicagoist.com/2010/09/26/repo_men_of_reality.php

Repo Men of Reality

http://www.cbsatlanta.com/news/25133432/detail.html

Company Promises Lower Mortgage Payments

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http://technorati.com/business/finance/article/banks-bailout-stings-unemployed/#comments

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http://www.cnbc.com/id/39192246/

http://www.ksl.com/?nid=148&sid=12447945

http://www.wpri.com/dpp/news/12_for_action/call12-car-loan-modifications-buyer-beware

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Companies prey on fear of repossession

http://www.siskiyoudaily.com/news/x907387807/Many-questions-arise-over-YAC-incident

http://www.reporternews.com/news/2010/sep/04/repo-man-a-people-person/

Labor Day, repo man: He is a people person'

http://www.cutimes.com/News/2010/8/Pages/NCUA-Warns-CUs-About-Perils-of-Indirect-Lending.aspx

http://www.sltrib.com/sltrib/money/50125049-79/loans-auto-credit-loan.html.csp

http://www.glendalenewspress.com/news/tn-gnp-autos-20100818,0,2410783.story

http://www.commercialappeal.com/news/2010/aug/17/better-business-know-meaning-of-used-when-you-go/

http://newsblaze.com/story/20100807152043j112.nb/topstory.html

Consumer Report: Carfax Scam