July 15, 2008
Here's an oldie but baddie that dates back some 20 years ago to Clark's first days on the air.
According to the FBI, advance-fee loans have roared back into action after years of being off our radars. Business owners and individuals are the typical targets.
Here's the way it works: Businesses are in a cash crunch because so many lenders are reducing or shutting down their lines of credit. That creates a fertile ground for smooth-talking con artists who represent themselves as being industry experts on finding loans. Unwitting victims get taken when they pay them an upfront fee for loan origination -- and never hear from them again.
The Wall Street Journal reports that some 100 business owners lost untold millions recently in one week because of this practice. But it's not always big-money targets the crooks go after. In one instance, the owner of a daycare was taken for $2,000 in the hopes that she'd get a $20,000 loan. On the other end of the spectrum, another business owner seeking a loan of $250 million wound up paying $260,000 upfront.
The answer to the credit crunch is never paying someone a fee to get loan for you.
There is, however, a related gray area -- and that's selling off credit card receivables. It's a way to generate revenue today on income that will be coming to you down the road. While this practice isn't illegal, it does often come with a massive rate of interest that can be upwards of 60%.
So if you're a small business owner in need of funds, see if you can find another way to keep things going. Selling your credit card receivables may be legal, but you may just dig yourself into a deeper hole.
July 15, 2008
The Mortgage Lender Implode-O-Meter is a popular website developed by former Emory University research Aaron Krowne. This unique portal monitors the overall health of lenders so that you know if they're safe to do business with.
Clark particularly loves the site's slogan -- "Tracking the housing finance breakdown: a saga of corruption, hypocrisy, and government complicity" -- because he believes those words ring very true.
We're still in the early innings of the corruption shakedown. More banks will likely fail; there will be continued credit problems for several years; and more bailouts of institutions deemed "Too Big To Fail" will come courtesy of taxpayers.
This last point really rankles Clark. When we bailed out Bear Stearns with $30 billion in guarantees, we taxpayers should have become owners of the company -- but that's not what happened.
Meanwhile, we indirectly feel the effects of the mortgage crisis whenever we fuel up at the pump. Over the last several months, Clark has explained how the Federal Reserve devalued the dollar to help out Wall Street bigs and their idiotic lending practices in the housing sector. Because of that devaluation, the price of a barrel of oil is nearly double and the price of gas is some 60% higher.
More lenders and banks likely will fail. So now is the time to heed FDIC limits (or NCUA limits, if you're with a credit union) and not exceed $100,000 in the bank. Clark would prefer that you stick closer to $90,000. That way you won't lose one penny of interest in the event of a collapse.
If you are over the $100,000 limit, reduce your exposure by having multiple accounts at different banks. You can also use the CDARS.com program to do it for you.
July 7, 2008
Some of the largest banks in our nation made aggressive marketing moves to get people locked into what Clark calls "the dumbest mortgage products ever." We're talking about option payment loans, also called negative amortization loans or Pick-a-Payment loans.
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June 25, 2008
Here's a story that's disturbed Clark so much it required both a Clarkonomics sounder and a rip-off alert one!yone who gets up in the morning and actually wants to get ripped off with a loan at 2,000%!
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June 23, 2008
The nation's banks are reaching new lows when it comes to customer no service. The latest wrinkle took Clark by surprise because he's received scattered calls about this issue without realizing there was a pattern emerging.
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