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In a long article on Bloomberg News, but well worth the read:
How unscrupulous lenders have used an obscure legal document to wreck havoc against small businesses nationwide.
The lenders’ weapon of choice is an arcane legal document called a confession of judgment. Before borrowers get a loan, they have to sign a statement giving up their right to defend themselves if the lender takes them to court. It’s like an arbitration agreement, except the borrower always loses. Armed with a confession, a lender can, without proof, accuse borrowers of not paying and legally seize their assets before they know what’s happened. Not surprisingly, some lenders have abused this power. In dozens of interviews and court pleadings, borrowers describe lenders who’ve forged documents, lied about how much they were owed, or fabricated defaults out of thin air.
By seizing their bank deposits, Yellowstone had managed to collect its money ahead of schedule(60k on a 38k loan) and tack on $9,990 in extra legal fees, payable to a law firm in which it owns a stake. In about three months, the company and its affiliates almost doubled their money. At that rate of return, one dollar could be turned into 10 in less than a year.
Everyone else involved in the collection process got a slice, too. SunTrust got a $100 processing fee. Barbarovich’s office(NYC Marshal) got approximately $2,700, with about $120 of that passed along to the city. The Orange County Clerk’s office got $41 for its rubber stamps. The New York state court system got $184.
Cash-advance companies have secured more than 25,000 judgments in New York since 2012 worth an estimated $1.5 billion.
It sure explains why my small business gets a ton of loan/cash advance offers.
It should be noted that these letters have been prohibited in some states for over 50 years, and banned nationwide for consumers since 1984. (but even when banned by a state, they pursue it in a state where they are legal.)
(Score: 2) by RandomFactor on Thursday November 22 2018, @02:35PM (2 children)
By 'lucky location' you mean one in a good school district?
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As long as there is a next generation, there will be good demand for homes near schools that give good results.
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(Score: 2) by legont on Thursday November 22 2018, @05:57PM (1 child)
No. Once upon a time I was offered a free (like in free beer) rent in Manhattan with an option to buy. This apartment is valued at $2+ millions now. Since the total US real estate value is just slightly up, there must be places that went total bust (and we all know some of them). This kind of lucky.
As per your school hypothesis, many of my friends home-school their children. Economically speaking, they prefer to pay their wives as opposed to the government. Internet makes it easier by day. I believe the trend will continue and there will be almost no good brick and mortar schools in the future.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 2) by RandomFactor on Thursday November 22 2018, @06:31PM
Hmm, fair enough, I'll concede that over time, school districts will matter less and less and other factors will increase in relative predictive value.
Average home retention (US, circa 2016) is ~10 years. I wouldn't expect school districts to be off the table in that period of time even though they are quite possibly weakening as a factor.
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