Month: April 2014
For now I’m going to spare my ‘financial institution’ the bad press they deserve. I’m going to remove their name from this and I’m going to give them about six months to one year to see how they treat me as a prime borrower. If they goof up any major (or minor) thing I’m going to come back to this post and put in their brand and shout it out to my home boys online all over Van City.
First of all, I had a kind of expectation that a non-major financial institution would be less likely to do scammy moves but I’m not sure why I thought that. Is a smaller mechanic shop less likely to scam you than a major car dealership? Maybe… that’s kind of what I was thinking.
My Notary or the Highway, Boy.
Before purchasing our second home with the same financial institution I had built a relationship with a great Notary Public named Jacqueline Kinsey (look her up if you need one). She was both a personable and lovely person but also was going to give me a small benefit in pricing because of the previous business I had given her. Oh, and she’s professional and efficient, too. Everything was set up and ready to go. The dates of subject removal (‘Subject to Financing’) were upon us and we sat down to finalize the transaction. At that point they asked me who my notary or lawyer was. I told them it would be Jacqueline Kinsey. They paused and said “We don’t see her on our approved list of notaries”. I said ‘You don’t need to see her on your approved list. She’s a notary in BC. She’s legit, certified, and I’ve used her in the past successfully. I know and trust her.” They said “Well… actually…. she has to be on our list to proceed.” I was in disbelief but I had no time left to dispute it. I contacted Jacqueline who confirmed that they were within their rights to force this on me. She also informed me that it would be very expensive to be on everyone’s ‘list’. So apparently, each financial institution has their own ‘approved vendors’ list just like a nasty Franchise model where Franchisees are forced to order from expensive and sub-par vendors just because the Franchisor makes more money!
I should also note that the very first thing the lawyer did was disclose the fact that he is acting on behalf of both sides which is, as he said, oftentimes not in the best interest of one side. But, as he said, “We do this all the time with mortgages and if you needed to sue later, you just couldn’t use us.”
Scammy! Unacceptable! Restrictive! Wrong!
Oh, Right! Here are the Disclosure Documents…
On April 23rd, a fax was sent from my mortgage lady at my financial institution to their ‘approved lawyer’. It was a “Disclosure Statement – Fixed Credit Limited Prepayment”. But this document was not sent to me. Let me review that for you. A disclosure statement designed to protect me, the borrower, was sent to the lawyer on April 23rd, but not to me… This document outlines the details of the mortgage, what kind of interest set up you have, and that kind of stuff. I actually read this stuff because I learned a hard life lesson that the devil is in the details in law. Within this document, while sitting in the lawyer’s office, I learned that I didn’t have a ‘skip-a-payment’ option (I thought I had). In section #4 ‘Security’, it says that this debt is secured against real property (the house). It also says ‘Waiver of Time Period, Form CCS Loan 151, must be attached’. The waiver that was sent to the lawyer’s was also dated April 23rd. The waiver says, in short, “For my protection, I have the right to see this disclosure statement 2 business days before entering into the loan but I am giving up those rights by signing this waiver.”
Did my financial institution not have a scanner on premises to send me – their customer – these disclosure documents on April 23rd when they sent them to the lawyers? If they did, they wouldn’t have needed the waiver and I would have actually had time to read the disclosure statement properly (2 full business days).
But what ended up happening was the lawyer explained to me that I was out of time, and the only way to get the financing done is to sign the waiver. It went something like this: “Time’s up, Bucko. If you’d still like the financing that will make sure you are not going to lose your $28,000 deposit to the sellers, you might want to sign the waiver.”
Granted that the contents of the disclosure statement were not super surprising, but that’s not the point. The point was that I was put into a high pressure environment and handed a pen by a lawyer (the Bank’s lawyer) to sign a waiver. The amount of pain that I stood to face if I didn’t sign was great.
Scammy! Unacceptable! Abusive!
I’m Your #1 4Eva, Baby!
The lawyer also drew my attention to what he said is ‘becoming standard practice with mortgages’. On the Form B for the Land Title people, the financial institution entered *more than double* the amount of the actual loan amount under ‘Principal amount’. So, essentially, they are giving me, say, a $400k loan, but they are registering on the title a debt of 1 million dollars! Anyone who has been involved in lending knows that this is important should the borrower default. When collection needs to happen, the courts will give them rights to collect based on their position on the title. When my financial institution registered nearly three times the amount of debt on title, they essentially forced themselves as ‘first position’ forever. Why does this matter? Let’s say you were with RBC and they did this. You decide one day that you want to get a Home Equity Line of Credit (HELOC) with TD because they have some kind of promo. TD would immediately look at the real estate title to see what other debts are owed and they would see *one million dollars* owed to RBC. Would you give a HELOC to someone like this who makes less than six figures per year? No.
So, by means of slipping me a pre-populated Form B document and without *ANY* discussion with me beforehand about this practice, my financial institution made me their financial go-to centre for no less than the next five years.
Scammy! Unacceptable. Wrong. Total Crap.
And one more thing.
Shame on you.
Oh, and one more thing: I have my finger on the edit button and I’m itching to expose your brand and share this story. The people will be quite surprised to learn about who this is.
I have been looking into the payday loan business. It intrigues me both as an entrepreneur but even more so on the ethics side. There is a serious stigma associated with payday loan businesses that they are evil and help to ruin lives.
This is a broadcast about our local city Burnaby showing the same thing: that we must unite against these vicious sharks… yet… I couldn’t help but notice how they didn’t have any of them on this panel to express their perspective. Here is a summary about the rally
You hear comments about this kind of business like: “I want to see them out of business” and ‘This is unconscionable’ or, “Let’s run these birds out of town” and even compare them to the likes of a sketchy massage parlour.
But then you hear comments by the same people a few breaths later about the customers of payday loan businesses like, “They don’t think about how they are going to pay back their loan when they get it” and, “They have marginal financial literacy skills”. The people interviewed like to call them ‘these people’ or ‘these folks’ as if to distance themselves. First they offer scathing insults to the business followed by belittling comments about its customers. I don’t see a lot of love here. But it gets better.
My favourite part is when the interviewer asked “Won’t these people have to go to loan sharks on the street if they can’t go to payday loan businesses?” One of the ‘solutions’ offered was to make more institutions like Pigeon Park Savings . Don’t get me wrong, Pigeon Park Savings looks great and is just what the doctor ordered for the neighbourhood where it is but to compare a customer of this service to a payday loan business is a shocking display of missing information. I understand completely because I had the same general perception about payday loan businesses until I spent some time behind the counter at one. The first thing you will notice is that customers at regular payday loan businesses are normal. They have jobs (hence the word payday), they dress normal if not nicely, they drive cars, etc. The members at Pigeon Park are not customers. They are members. It is a service, not a business.
Then it was suggested that ‘more credit unions should be doing this [Pigeon Park style]’ but then a breath later they admit that no one does it because it’s expensive. And that brings us to our next topic.
Loans are very simple actually. The rate of interest goes up in proportion with the amount of risk taken on by the lender. If you have botched up your credit history for whatever reason, the banks will kiss you goodbye. You can now go to a place like a payday loan company and borrow money at high rates.
I also think it’s quite amusing that no one ever compares Visa or Mastercard in the same light as payday loan businesses. Their rates are a couple of percentage points lower but equally if not more dangerous. With a payday loan company you can only go so far but with credit cards you can go much deeper. Although I have not yet done the research first hand, I was told that after declaring personal bankruptcy Visa and MC are still legally allowed to come after you somehow. If that’s true you should look very dimly at these two ‘well branded’ companies.
Now let’s look at a mortgage. Articles like the ones I mentioned above about how they are worried that people are getting sucked into the ‘get it now, pay the consequences later’ mentality. What do you call a mortgage? It’s a house you can’t afford now, loaned to you by a payday loan business called a ‘bank’. If you stop paying them on the promised cycle (same as payday loan business) they will take your house. I’m struggling to see why they are less ‘evil’.
So, who really wants to get rid of payday loan businesses? Have you ever tried to start a bank account at a bank so you can run your payday loan company? I dare you to try. Tell them that you are starting a payday loan and cheque cashing business and you would like to open a bank account. They will tell you to take a long walk off a short dock, most likely. Why? You are competing against them, of course. You are starting your own ‘bank’. They don’t like this at all but they let it slide because it’s better that someone else deal with ‘these people’ than them. It’s better to appear ‘clean’ and ‘civilized’ and not loan money to ‘these people’. They will cover that by telling you that it’s related to money laundering legislation – but then ask them how Money Mart gets their cash.
Through all these articles, though, the one thing that everyone agrees upon is that the customers are making what is viewed as a bad financial decision. It could probably be quickly proven that the customers are indeed lacking in financial literacy. So the root of the ‘problem’ is a lack of financial education.
Where, people, can we point the fingers for that one? I’ve got a good idea. How about *schools*? Tell me when the Burnaby School Board implemented mandatory financial education courses? If we go and check the requirements for graduation, of all those courses, how many of them involve money? I’m too lazy to check but I bet the number is zero. So we’ve got our scapegoat: the education system. Let’s move on.
Let’s say everyone agrees that payday loan businesses are ‘bad’. Now the question is, should we allow them to exist? The fine gentleman in the broadcast above would ‘run these birds out of town’. Is alcohol bad? Are there people who, even though they received proper education about alcohol, can’t control their drinking? Yes. So, let’s get rid of alcohol. From now on, no more liquor stores, or alcohol to be served anywhere because these people can’t control their drinking. I’m game. Let’s do it. And while we are at it, I’ve noticed that government-endorsed casinos are popping up like popcorn. Mr. Councillor, I didn’t hear you mention anything about those. Should we run those birds out of town, too? I’m thinking the tax dollars from those slot machines are probably not hurting your salary. I’m guessing you aren’t going to be raising a large stink about those institutions. What is your solution for gambling problems? I think I saw it on a bus stop “When gambling isn’t fun any more, call us.”
So, how about instead of wasting your time trying to destroy an industry that is getting people out of short term jams (ie. to put gas in their tank so they can get to their job) without going to back alley loan sharks, that you create financial literacy courses in school and support programs for those who are lost in debt? Isn’t that the Canadian way?
I’m just saying.
… I’m just saying.
Further Unflattering Reading on Payday Loans
- Mobile apps make ‘the problem’ worse
- Ontario files suit against payday loan operator
- Wonga downplays 5,853% interest rate
- more? Send em in the comments. Positive ones would be cool, too.
Are LED bulbs worth it… yet?
I’m pondering the question.
This blog post is simple. I want to make sure I don’t lose the best post I’ve seen on the topic so that I can come back to this and finish my study! I will conclude my thoughts on the matter after I actually cross that bridge.
Here is the link to the post
Along a similar vein I will also have to study the handwashing versus dishwasher debate and make a decision. My wife and most people I know still seem to think hand washing is the way to go. Time to conclude this somehow.
If you ended up on this post and are looking at energy saving in general, you might also want to take a look at this post I wrote recently.
As usual, please comment below with your ideas, thoughts, improvements, etc.
It’s sad that we’re even using Skype on Ubuntu considering it’s owned by a company with zero interest in open source… but alas, some habits die hard and we don’t want this little program to prevent you from realizing that Ubuntu is, by far, the best thing that will happen to your computer life (and other parts as well – some of my best friends came from the Ubuntu community). Just for the records, though, we should be supporting the build of open source versions of VOIP software, or the inclusion of VOIP features in apps such as Twinkle, Jabber, and the like. At any point MS could pull back their API and you are SOL, PAL.
Everything in my Ubuntu life works very well – except for this non-Ubuntu annoying little foreign habit that I haven’t given up. In particular I’ve been fighting my sound on just one laptop. I’ve tried a myriad of tutorials and this and that, but what I’ve found to be a reliable work around is a simple change in the way I launch everything. Here is what I do and I hope this solution is a nice easy way to fix your sound issues found within Skype in some beta releases of Ubuntu:
- Make sure your headset (or webcam, or whatever external device you are using for your sound) is unplugged.
- Start your computer and make sure everything else is up and running.
- Start Skype.
- Log in. You should hear the usual startup sound. If not, you may have to open your sound settings and mess with the ‘alert volume’. I didn’t find that little trick in any tutorial and it worked for me.
- Plug in your headset or audio device
- Follow this tutorial (the one with the screen shot with the red arrows). For me the solution was to unplug mic from sound card and plug it back in. Might as well. Only takes a second.
- Do a Skype test call. Hopefully everything is working well.
Although I don’t have time to research it, I think the source of my problems (besides the fact that Skype is the culprit in general) is that I have other audio-related software running and they fight for priority over the sound card. Je ne sais pas. All I know is this flow works for me and got me back in action while I try to find a way out of depending on Skype or Google..
April Fools day has thrown me off since I was a kid. I thought it was quite irrational if not ‘wrong’ that there would be a day when you could trick (a.k.a. lying) your parents and do pranks and not get in trouble. I noticed people also enjoyed tricking me. For me it was the only day of the year I could put saran wrap over the toilet bowl or point the water hose out of the back of the toilet tank and not get in serious trouble. All I had to do was make the ‘April Fools’ mercy cry. I knew something was wrong with this day.
The real moment of curiousity and intrigue came while I was living in Korea. I was completely thrown off that Koreans also ‘celebrate’ this wacko tradition of tom foolery. I thought it was another inexplicable western mystery (like Santa Claus or the Easter Bunny)(which incidentally I have blogged on and de-mystified slightly) but apparently the Asians like to have a day of acceptable folly as well.
Here I am thirty some-odd years later and I still don’t have any of the answers so this year I started doing a little casual research that I thought I would blog for myself and anyone else who would like to solve the mystery of its roots. Especially absent seems to be the participation of Korea in this wackiness. For example, did the west, by chance, steal the tradition from the east and claim it as their own (like chess perhaps) or vice versa? This truly was intriguing.
I did the usual large search engine search and came up with the usual suspects:
- Wikipedia page which lead to my favourite explanation of the day – Sizdah Be-dar from Iran
- An info page by some info article site
- Huffington Post article which contains lots of faith-rooted suggestions for the history. This was probably the most enjoyable and generally interesting article of the three so far if you have to choose for the sake of time 😉
- More? Now it’s your turn to add to the learning
Since this is still a wild card, I would love if someone could, in the comments below, throw in some useful links so that by this time next year I can publish a very awesome ‘guide to April Fools day’ kind of thing. I’m especially looking for when and how April Fools day started in Korea. I’m guessing at this point maybe the foreign soldiers brought it in and played pranks on their unsuspecting Korean comrades to improve morale and help them laugh amongst nasty blood shed?