Here we go again. (banking issue)

[alph]

Alright, this ticks me off. 

My brother lives pay check to pay check, and has a wife that can’t (doesn’t want to) work, so there’s never enough money.  This last week he was late on his mortgage payment and the mortgage company charged him a $200 late fee, the bank he has his savings with covered the $200 and then charges $8 per day until it is ALL paid off.  so, each day is multiplied by $8, so after 5 days, it’s a $40 fee added on to the bill, then $48 added the next day, and $54 the next!, so on and so on PER DAY!

I’ve never been in that situation, so I never believed that they would (could) do that.  I called his bank to question the daily charges and they explained it to me, of course this got me upset, all that was going through my mind was that what they call a late fee is actually a multiplier. 

I’m not making excuses for my brother; I know a lot of people are hurting due to the increase in fuel costs.  But HOLY CRAP do those banks rip people off!!!

IS THIS NORMAL, OR IS IT JUST MY BROTHERS BANK???

[ArmyValker]

Wow. He needs a new bank.

[Daniel Meyer]

In banking, credit card, and car or personal loan industry...people who are "marginal" are ripe targets.

I've seen 35% interest on credit cards, car loans at 25% interest, with an additional amount added to the price of the car as well because they were financing (like 25% of the price of the car extra). "Rent to own" places, paycheck loans, all of that kind of stuff would be illegal in Texas under "usury" laws, but the feds superseded all that years ago by saying state law could not apply to  banks or credit companies unless they ONLY operated in that state. Paycheck loans amount to 1000's % APR...

Morally it sucks. It's all legal though.

"Just doing their job". Special place in hell for em. (linky for some reading)

[Jack]

If you have doubts about it being legal, cal the Attorney General in your state.  It wouldn't be the first mortgage company or bank that exceeded legal limits.

[Varmintmist]

It sucks, but your brother could have just paid it on time, or since the bank covered it for him with a 8/day late fee, he could have paid it off the day after and only been out an extra 8 bucks.

There is probably a cap on the fee that it seems that your brother will learn about soon.

[Bobbo]

Sounds like he had overdraft protection, and overdrew his account.  It's pretty much a credit card type of loan, where they charge a transfer fee, then interest compounded daily.  The fees and effective interest rate you describe sound ridiculously high to me.  $8 per day on a $200 debt is like 1460% APR!!   

[alph]

There is probably a cap on the fee that it seems that your brother will learn about soon.

no, saddly my brother WONT learn that lesson.  this isn't his first ride on the bull at the rodeo....  what kills me is that some people (like him) always blame someone else for their problems.  it's the banks fault for this, it's his bosses fault for that, blah blah blah.....

my wife hates me now 'cause i lonet him money.  now, not only is he not getting sex from his wife, i'm loosing out too!! 

[RoadKill]

I once rounded down when I should have rounded up on sales tax. KS dept. of revenue notified me after 3 months that I was .01 dollars short on monthly sales tax. after penalties,over charge surcharge,rape tax and interest I owed them 46 bucks! I mailed them an extra 35 cents (or what ever a stamp cost back then), 6 or 8 months later they mailed me a check for 1 penny less than the cost of a stamp! where do you think the banks learned it ?

[bigguy]

now, not only is he not getting sex from his wife, i'm loosing out too!!

 
Are you still getting sex from your wife?  

Seriously, I feel for your brother and you. I doubt they've done anything illegal. Those folks make a living of raping people legally. It's the golden rule. (Those with the gold make the rules.) They'll be careful to stay on the legal side of the line.

Disclaimer here. I used to work for a bank and my wife still does. I wish she could quit, be we've got credit cards to pay.

If I were King of the forest, all loans would be paid in full once interest, penalties, principal and fees equaled 3 times the principal. You borrow $100, and you're paid out at $300. Period.
You'd pay much less of course if you make payments on time. The idea that you can make payments for years and never reduce the principal is unconscionable. And there was a time in this country when the courts would have thrown the b*****ds in jail on those grounds.

[RoadKill]

now, not only is he not getting sex from his wife, i'm loosing out too!!

 
Are you still getting sex from your wife?  

Seriously, I feel for your brother and you. I doubt they've done anything illegal. Those folks make a living of raping people legally. It's the golden rule. (Those with the gold make the rules.) They'll be careful to stay on the legal side of the line.

Disclaimer here. I used to work for a bank and my wife still does. I wish she could quit, be we've got credit cards to pay.

If I were King of the forest, all loans would be paid in full once interest, penalties, principal and fees equaled 3 times the principal. You borrow $100, and you're paid out at $300. Period.
You'd pay much less of course if you make payments on time. The idea that you can make payments for years and never reduce the principal is unconscionable. And there was a time in this country when the courts would have thrown the b*****ds in jail on those grounds.

Sounded like nobody was getting sex from his brothers wife...We dont judge 'round here 

[mtrdrms]

Terrible situation for your brother.  Ive been there and I can tell you it sucks to be judged.  There was a great book written in the 60's I think called "The poor pay more" by David Capovitz.  Great read on this matter but it just a shame that the people with least available pay the most (interest rates for people with no assets, whats in cheap food, etc.).  I know there are many that disagree but its often unreasable to ask the poor to stop being poor.

[Robert]

That stinks and I agree that you should check if this is legal. We have to pay more on our interest rates on credit cards in part due to the limiting fees that the card company's were charging in penalties. This video will really make you burn about what the banks are doing be sure to watch when Matt from Rolling Stone magazine will really open your eyes about 13 minutes in its really good

Keiser Report: Fleeing Dollar Flood & Fraud (E141)	powered by Aeva

[BigAl]

Now that we have credit cards, new laws after the bank bailouts(OH BY THE WAY WE BAILED THEM OUT) extra careful on who gets a loan.

They can really jack in the screws on just about anybody that is late or overdrawn.(My wife with her own accounts is a prime example)

But with Credit Cards the ole Loan Shark is out of business.

My God, if you only make the minimum payments on your cards,, they really have you by the Cajones.


My wife's bank told her one time about the service charges they were charging her for having a savings account, was to show you people how to save

money.

Appropriately she closed the account.

[alph]

here it's almost 2am, i can't sleep cause i'm thinkiing what kind of situation my idiot brother is in (again).  did some number crunching on the calender. 

sunday, may 1st, late on mortgage payment, (he sent in the payment on the due date, but was past the time slot for payment to be registered for that day.) mortgage bank charges $200 late fee, his bank covers $200, then charges $37 fee.  gives my brother three days to make good on $237, but doesn't tell him until the fifth day.  wednesday the 4th, charges first $8 for day, by the end of the first week of the month the bank has charged him $317.  By two weeks, it'll be up to $739, after three weeks it is completely impossible for him to make enough money in one days labor to pay just the daily fees.  And for some ungodly reason, our government bails the banks our.  wow, that's nice......  i sent him enough money to get him completely up to date, but since he's at work, he can't transfer the money in time, the bank closes before he gets off of work.  bank charges another another $54, because the WHOLE AMOUNT due is not paid, additional fees are added, my brother doesn't have the difference and will most certainly be charged another two additional days of late fees unti this coming friday, payday, by then he will be another $172 short......

WOW, and here people hate lawyers!?!?!?!!!

[Bill]

Alph, have your borther check into a credit union in the area if he is elegible. Most of the time they are a lot more reasonable and some of them do offer mortgages.

[Varmintmist]

Credit union won't lend to someone with a payment history like that. They have a high standard on loans.
To get the good loan, they are pretty sure that you are going to pay them back.

[Willow]

... cause i'm thinkiing what kind of situation my idiot brother is in (again).  did some number crunching on the calender. 

Alph, it appears you're falling into the same trap as does your brother.  You described him earlier as not acknowledging his own responsibility in what goes wrong in his life.

Quite honestly, the situation you describe is unbelievable, and I mean that in the most literal sense.  My bank doesn't work that way and I surely wouldn't sign up for a program that would "cover me" for a two hundred dollar payment and then charge me a thirty-seven dollar fee and eight dollars each additional day.  It sounds more like he's doing business with a loan shark than a bank. 

Banks take your money and mine, pay us a reasonable (in the eyes of the current market) return and then loan that money out to people and businesses who are willing to pay a fee for the service.  Quite frankly, banks have some fees that seem unacceptable to you and me attached to loans and services to persons who, according to their assessments, have a high probability of defaulting. 

It sounds (appears) to me that what is being experienced here is a tragedy of errors that have lead up to a ludicrous situation.  I suspect that we (your readers) have arrived too late on the scene to get a proper perspective of the whole situation.

I wish your brother well.  Someone has already said that it's simply not reasonable to insist that the poor stop being poor.  I agree.  I would project that unless you, a financially stable party, continue to take care of your brother's debt the bank(s) involved will certainly lose more than they will gain in these transactions.  If they are legitimate banks it's your money and mine they're working with.

I hope the banks in which you and I have our money were among the ones who either were "bailed out" or didn't need to be.          

[Varmintmist]

  Someone has already said that it's simply not reasonable to insist that the poor stop being poor. 

Why? Why isn't it reasonable?
Well, poor is the wrong term for the situation at hand, broke is the correct term. Poor is doing without while doing everything you can, living within meager means. Broke is not doing without and not living up to your responsibility.

I think it is very reasonable to insist that broke people stop being broke.

I have been poor, and I was broke once. I had some assistance this past year trying to make me broke again. Around Aug., I put her clothes in garbage bags on the back porch with the option of taking the car free and clear and hitting the road, or doing a crainial rectotomy, and she seems to have come back into the fold less credit card. With a whole lot of "No, you don't need...." and putting enough into the CC bills to buy a nice used tourer, the CC bills are once again down to what you buy, you pay off. If you don't have it, you don't buy it, and money in the bank doesnt mean that you spend the bottom line on the statement every month, and every 6 months the car insurance bill isn't a crisis.
Broke is a lifestyle, and it runs in families. The spousal units siblings have all been or are currently broke, every..... single.... one, of 6, and parents.

I hope the banks in which you and I have our money were among the ones who either were "bailed out" or didn't need to be.          

+1
 Mine didnt. Credit unions and a local bank that carries their own paper. You buy your bank, so shop your bank.

Instead of buying your brothers debt, buy him a book. There was one that one of my BIL's insisted the family get after he blew everything he had, I think it was Total Money Makeover by Ramsey. I read it, but I alrready did 90% of what was reccomended. It would be worth the 15 bucks.

[Jess from VA]

I quit all banks 30 years ago... I will only do business with a credit union. 

Banks are number two on my hit list, insurance companies are number one.