Charlie
Hendersonville,#2Consumer Comment
Sat, July 10, 2004
I agree with Mark in PA that The Money Store was a non-conventional/conforming lender and the higher rates associated with their loans represented the higher risk of "less-than-perfect-credit" borrowers, which also includes those that have high debt ratios (which is often the case with those on a fixed income such as SSI) - interest rates are risk-based as are the premiums of auto insurance, life insurance, etc. The fact that the parents in this complaint are said to "owe more than they borrowed" may simply be in the way that HomeQ is reporting to the credit bureaus. Some companies report the "total of payments", that is to say that the balance "owed" is reported as the total of all payments if the customer were to pay for the full term. This amount includes all the interest, which would not be due in an actual payoff. Check with the lender to see if the balance reported on the bureau is the actual principal pay-off or the "total of payments" due. Mark is correct that HomeQ (as the servicing arm of a bank lender) is regulated by the OCC. You should be able to make your case to that body.
Mark
Philadelphia,#3Consumer Suggestion
Tue, May 11, 2004
The Money Store is a sub-prime lender. Typically, you would only use them if other sources of money were not available. This is why their rate is higher. What you parents should do is contact the OCC (Office of the Comptroller of Currency, the Federal Agency with banking oversight) and file a complaint under Regulation Z (The Truth in lending / Fair Credit Act). They will need to provide documentation as to any in appropriate charges that they have been hit with. The penalties for lending organizations that violate reg z can be quite severe.