Don’t Put that Mortgage in Reverse. If there’s any possible way to make a buck off consumers, you better believe the banks will figure it out. It seems there’s just no end to the stuff they get up to. Case in point, a Seattle mortgage lender, The Seattle Mortgage Co, a unit of Seattle Bank, is being sued in California over alleged illegal lending practices.
Here’s the deal, the suit focuses on fees paid to brokers and charges levelled against borrowers in reverse mortgage transactions.
FYI—a reverse mortgage, also known as a home equity conversion mortgage, is available only to people over the age of 62 years, and is heavily regulated by the department of Housing and Urban Development (HUD)—but maybe not heavily enough.
While it is the intent of the regulation to ensure that mortgage brokers provide their customers with the best financial advice based on the customer’s needs, it is possible that the brokers may have been influenced by the fees they receive from the banks selling the loan products. In other words, it may have been in the brokers’ and bank’s best interests for your grandmother to take out a reverse mortgage—but not necessarily hers.
The class is estimated to affect as many as 7,800 seniors, and if the court finds in favor of the plaintiffs, reimbursement of costs and damages may total as much as $56 million, the lead attorney representing the plaintiffs has said. And that’s just one state. Similar practices may be going in on other states… but that remains to be seen.
Payday Loan Violations Get Settled. And then there’s the pay day cash advance market…Advance America, Cash Advance Centers recently settled a class action for $18.75 million.
The Spartanburg-based provider of payday and other loans was sued over allegations that it violated state consumer finance laws, the state being North Carolina, since 2003.
In a press release, Advance America has said it plans to establish a settlement pool to compensate class members. The agreement is subject to court approval and other conditions.
This suit has a class of approximately 144,000 borrowers, who will share $12 million, or $83 each, after payment of legal fees and other expenses, according to the Associated Press.
Not Just the Ringtones that were Annoying. And let’s not forget the whole mobile phone content thing….A group of mobile content providers, including Cylon, Cellfish Media, Predicto Mobile, Too Lazy, the application provider 3C Interactive, and the aggregator OpenMarket, have agreed to settle a number of class action lawsuits against them, involving claims that these companies charged wireless subscribers for “mobile content”.
Just in case you were under the illusion that mobile content refers to your emails, “Mobile content” in this case refers to electronic products such as ringtones, games, graphics, news, and other alerts that are provided through mobile phones and are charged directly to consumers’ mobile phone bills. Although a relatively new form of commerce, mobile content has evolved to form a large and increasingly important industry. No kidding. White noise is expensive, it seems.
The settlement has been preliminarily approved and if finally approved by all, will provide for refunds for unauthorized mobile content charges to settlement members, and attorney’s fees of up to $3.2 million. Settlement members are eligible to receive a one-time cash award of $10.00, or a refund of up to three months of content subscription charges.
Members of the settlement class include any person in the U.S. and its territories who, at any time prior to September 13, 2010, was billed and paid for unauthorized content from any of the settling Defendants.
Ok. That’s it for this week. I hear the bar calling my name…and I’m turning my phone off…now.