Saturday, December 29, 2007

What Gives Councilman Lew Fidler the Nerve to talk about Predatory Lending?

posted by bigapplecharm
Sat, 12/29/2007 - 10:43pm
A couple of weeks ago I was at a meeting sponsored by Lew Fidler that had to do with the current sub-prime mortgage mess. He referred to this tragic circumstance as "predatory lending." This really surprised and annoyed me, since I recently spoke with someone who is in a terrible financial situation and made the mistake of borrowing money against a pending lawsuit, which should have netted her a good deal of money to help pay for medical bills due to a severe injury caused by the people she was suing. This person will probably be nursing her injuries for the rest of her life.

Instead of collecting the large sum awarded her, which would have helped pay for the medical care she desperately needs, she wound up owing Lew Fidler's company (a lending institution that loans money at rates often higher than 50% to people in financial trouble), the entire amount of the final settlement.

It seems that Fidler's company seeks out people in financial trouble, who have a lawsuit pending in the courthouse. Then Fidler sends a letter to these people, asking if they need money while they wait for their settlement. Only the poorest of the poor would take this opportunity, since the interest rates are so usurious. My acquaintance claims that she paid interest of over 60%!

Most people who need money would ask a family member, or take out a second mortgage, or use credit cards. Only someone who does not have any other option would borrow at such a thieving rate. This usually means people who are so tight for money that they cannot obtain a credit card, or afford to own a home. So the offer of what looks like easy cash is very tempting, even at such enormous interest rates. Lots of time people who are in dire striats do not look at the end game. In this case that would be winding up with much, much less, if any money at all. The high interest rates certainly do add up, eating up all of the money a person would have gotten, if they had only been able to wait rather than borrow against the future proceeds. This is out and out robbery, in my opinion.

This acquaintance said that she was drawn in because she was told that if she lost her case, she would owe Fidler's company nothing. But first Fidler's company determines the value of the case, before offering the loan. The company claims that technically what it is doing is not loaning money, because if the borrower looses the case, they would not owe anything. But, as I said, first Fidler decides the monetary value of the case before offering the loan. The trouble is, the poverty-stricken person, who is put in the position to borrow money against the proceeds of their case, usually winds up with NO MONEY BECAUSE IT HAS ALL GONE TO FIDLER'S COMPANY IN INTEREST.

So, really. Who is the predator? We have a New York City councilman preying on the poor, taking their money as if it was his own. And not even caring. He is using his position to trade on the misery of others. I wonder if his company has any dealings with the city? Are any of the people that he loans money to in the process of suing the city of New York? Is he getting New York City's money too? Taxpayers money too?

This is all very upsetting. I am wondering if anyone else has heard about this?

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