Small business

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“We Are All Socialists Now: The Perils and Pro...
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Well, they’re at it again.  Do you remember all those complaints about mortgage lenders and their unethical practices?  Hidden fees, rate switches, delays at closing, etc?  Well, they haven’t stopped.

http://boss.blogs.nytimes.com/2010/02/01/for-some-arc-loan-borrowers-an-expensive-surprise-caps-the-long-wait/

“And Ms. Essl found one more unpleasant surprise waiting for her in the closing papers: a nearly $600 fee, to cover the cost of a lien search. ‘Nowhere, anywhere through this whole process,’ she said, weariness evident in her voice, ‘did anybody say there were fees of that magnitude.'”

and

“For Ms. Essl’s $20,000 loan, the…fee worked out to 3 percent.”

Hidden fees in the range of an extra 3%?  So, if you borrowed at 6%, you’re now borrowing at 9%.

Who is the unscrupulous institution?

The federal government, of course.

It’s true that the fees aren’t being charged by the government but by the banks loaning the money.  But, the fees are charged because the government requires collateral on every loan, which means a lien search must be done.

And, the fees aren’t even the worst part:

“Sharon Essl, a restaurant owner in New Jersey, commented that after submitting an application to Wells Fargo on July 31 — and resubmitting it three more times — her loan was finally approved two months later. ‘But — wait for it,’ she wrote. ‘Still have not closed!’ In an interview, Ms. Essl said that she received the closing papers last Monday and that the first installment of funds was due by Jan. 28 — four months after she was approved.”

and

“In December, Elease Caracci wrote… that she had won approval for her A.R.C. loan in early August but had yet to receive any money.”

Four months is a big deal to any small business.

When are voters going to understand that the pipe dream they’re handed on the campaign trail is just that?  A dream.  When the government gets involved, the strategy is good about 25% of the time and the execution is good about 2% of the time.