Representatives from each of the eight subcommittees that comprise the Transition Task Force (TTF) participated in an “Update and Dialogue” sponsored by Princeton Future on Saturday morning at the Princeton Public Library.

In his introduction, TTF vice chair Scott Sillars expressed the hope that the transition will turn out “to be seamless,” except, perhaps with minor changes like having to “go to a different office to a pay a parking ticket.” He emphasized, however, that the TTF’s charge is to “make recommendations” to the two governing bodies, who will ultimately decide on what gets implemented.

Mr. Sillars reported that the Finance Subcomittee is monitoring implementation plans against cost savings estimates; tracking transition costs; providing a liaison with the state; developing a combination of 2012 budgets; and monitoring other impacts of consolidation on the Open Space Tax and sewer rates. Debt consolidation does not pose a problem, but the different accounting approaches of the Borough and the Township need to be reconciled, he noted.

Looking ahead, Mr. Sillars said that the Finance Subcommittee hoped to have a draft “combination budget” by June; a recommendation on the Open Space Tax by August; and a summary of planned savings and transition costs by mid-Fall.

Task Force member Hendricks Davis reported that the Boards and Commissions Subcommittee had “just about completed” its inventory of “existing entities,” although it will continue to be regularly updated. The Boards and Commissions subcommittee will also make recommendations for the integration process, and Mr. Davis applauded the fact that “so much happens in this community because of citizen participation.”

Joking that their responsibilities run the gamut from dog licensing software to infrastructure support, Information Technology (IT) Subcommittee spokesperson Gary Patteson described that group’s efforts to inventory existing hardware, software, vendor support, and current costs. They believe that a new email system will pay for itself after just one year. The subcommittee hopes to submit a plan for IT deployment and hardware location by July 15.

Creating a timeline — including the “lead time” required for IT implementation — that will be delivered to the TTF and both governing bodies has allowed this subcommittee to work with IT staff and department heads, Mr. Patteson noted, although IT implementation for the new Police force is the purview of the Public Safety Subcommittee. IT collaboration with the Princeton Public Schools may be considered at a later date.

The Facilities and Assets Subcommittee, said Bernie Miller, is working on ways to accommodate the staff of the new Princeton in existing facilities “in a manner that provides for the effective operation of municipal departments, long with user-friendly access.” Efforts will be made to locate single departments near others with related concerns to maximize their operations. KSS Architects, Mr. Miller said, have been engaged to consult on the subcommittee’s work.

Jim Levine was the first of the morning’s speakers to note the use of a new graphic that depicts “putting the pieces” of two organizations together. Personnel Subcommittee areas of concern include the overall workforce sizing process; reconciliation of employee policies/procedures; and promotion of “cross pollination” among different offices. Recommendations regarding “redundant positions” and severance packages will be presented mid-May, said Mr. Levine. Providing stability “while conducting thorough reviews” is anticipated to be a challenge, he observed, adding that the Subcommittee’s belief that the new organization should reflect “a balance of Borough and Township experience.”

Jo Butler reported that an organization chart for the integration of the two municipalities’ public works departments; “recreation maintenance; “engineering; land use; planning; construction; zoning; and fire and housing safety will be forthcoming. Brush and leaf collection will be coordinated, and garbage and composting systems will be put out for bid together. Ms. Butler noted that there will definitely be just one Public Services Commission.

Bernie Miller spoke about the complex combination of personnel, facilities, and technology that the Public Safety Subcommittee is addressing in order to ensure that when someone dials 911 on January 1, someone “will pick up the phone.” Merging police departments includes merging police dispatch, and emergency services coordination. No action is needed on the Fire Department, which already serves both municipalities.

It is anticipated that there will be 55 policemen and women on the new combined police department. Questions of the location of the force, the location of dispatch (and, perhaps, whether to outsource the dispatch function), and the importance of having common technology are all being addressed. Although Princeton University’s public safety department provides “great support,” the fact that they do not carry firearms is significant.

Mr. Sillars encouraged area residents to familiarize themselves with the Task Force’s work by attending its public meetings, and by visiting the website, www.cgr.org/princeton/transition, where agendas and minutes are published. Critical recommendations are expected to be presented at the Wednesday, May 16 meeting at 7 pm in Borough Hall.

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Youve gotten to the breaking point where you cant imagine trying to dodge one more call from a collection agency and need relief immediately.

Unfortunately this sinking feeling is all too common across the heartland today. According to a recent survey by Bankrate.com, four out of 10 Americans are on the verge of financial collapse, with 25% of survey participants reporting that they owe more on credit cards than they have saved for an emergency.

Surprisingly and most alarming, those supposed to be on the brink of retirement were more likely to have more credit card debt than savings.

These are the people who are supposed to be getting ready to retire. This may be an indication that they are not really ready, says Mackey McNeill, CFA, president and CEO of Mackey Advisors.

Unfortunately what may be occurring is this pre-retirement group may be helping their children to stay afloat as the economy struggles to recover. Bankrate.coms survey reported that 31% of the survey respondents who had children have credit card debt that is higher than their savings.

Credit experts contend that consumers approach debt backwards by struggling to first meet minimum payments each month only to have nothing left over for savings. Gail Cunningham, VP/Membership and PR for the National Foundation for Credit Counseling says that consumers should be paying themselves first before disbursing cash to creditors.

I really land on the side of savings, she says. People absolutely need to service their debt, but I do know that peoples entire financial well-being can be wrecked by one flat tire, one visit to the emergency room or one leaky toilet.

If you are starting with nothing in your emergency fund, but require a benchmark figure, stockpiling up to two years worth of expenses would be best.

Ideally, I would like two years worth of expenses. That is really optimistic, though. At a minimum youd want six months to a year, says Kimberly Foss, CFP, president of Empyrion Wealth Management.

Should You Consider a Debt Management Company?

In some cases, the consumer will head to a debt management company, hoping that a credit counselor will provide guidance and direction. Unfortunately following the collapse of the economy, numerous predatory debt management companies sprung up across the country, causing more harm than good to the consumer.

While many of these companies promise the moon and the stars, credit counselor Richard Musser says that getting out of debt does not happen overnight. There is no magic bullet, he explains. Its going take time. If you got yourself into a debt situation, its going take time to undo it.

Musser says that a debt consolidation or management company may help you reach a settlement where you end up paying less than what you owe, but the work done to whittle down the debt may have a negative impact on the consumers credit score–which could have a lasting effect for several years. Additionally, some companies charge up front fees or try to cross sell additional services in an effort to boost that fee.

While not all credit counseling/debt management companies are considered to be predatory, the consumer will have to perform significant research before handing over his or her debt history.

The Federal Trade Commission suggests that before agreeing to work with a debt counselor, consumers should ask questions such as:

• What services do you offer? The FTC recommends that consumers avoid companies that push or only offer a debt management plan (DMP) as the only option before evaluating your financial situation.
• What are your fees? Get this detailed information up front and get it in writing.
• Is there a formal contract I have to sign? Dont sign a contract without reading it first and/or having your attorney evaluate it.
• How are you counselors compensated? The FTC says that if employees are paid based on the number of services you sign up for, to consider that to be a red flag.

Your Credit Union Has a Better Alternative

Rather than wading through the sketchy world of debt consolidation/management companies, go with a friend and neighbor you know–your credit union.

Many credit unions offer comprehensive debt management and financial literacy assistance to not only help you pay off your debt, but jump-start that savings/emergency fund.

For example, PrimeWay Federal Credit Union ($412 million, Houston, TX) has had a Debt in Focus program for about four years. We rolled it out because we had a number of members who were struggling financially, but they never came into a branch, says Michelle Oshinski, SVP Marketing amp; Government Affairs. Our mission as an organization is to help our members create financial strength through education, service and stewardship. We trained a number of employees as Certified Financial Counselors, but we also wanted to help those who might be too embarrassed to come into the office.

Oshinski cites a few examples where the credit union has pulled the member back from the brink of financial disaster. One member wentthrough a terrible divorce after coming to this country fromJapan, she said. She didnt have any local family and was left with horrible credit card debt as a result. We gave her a chance and she proved herself. We finished helping her settle the last amount of credit card debt, saving her a huge amount of money. She rebuilt her credit, and her life. She ended up going back to get her doctorate in mathematics, teaches at U of H downtown now and has preached to her students and faculty how credit unions can change lives.

The second example Oshinski shares surrounds a member who came into a branch to discuss payday loans. He had spent thousands of dollars and was living off payday loans. He finally got to a point where none of the loan companies would lend to him and his payroll wouldnt make the needed payments.

He was fromAfricaand worked as a gas station attendant for over 20 years, she continues. He had a wife and three kids who were getting older and ready to graduate from high school. This man fell apart as he recounted how hard he worked to take care of his family and the one thing he regretted most was that he didnt own a home and lived in the same apartment since coming toAmerica, getting married, and starting his family.

Oshinski says that she talked with the member and through the conversation realized that he had a nice sized retirement built up with a recognized oil company. He never used his retirement money to help himself. This man was able to take out a temporary loan with his 401k to payoff the payday loan places and clear his credit.

Then the member qualified to take out a temporary loan to payoff the 401k loan. His credit score improved during this process so much so that he qualified for a mortgage loan. He used his retirement money again to make the needed down payment. Within a year, this hardworking man went from a very low point to a very high pointin his life. He touched base with me after completing the process to thank me for taking the time to talk with him and point out a way he could make his dream come true.

Its stories like PrimeWays that demonstrate how going to a credit union allows the member to move beyond the cycle of debt and learn how to manage money and make it work to their advantage.

Golden 1 Credit Union ($7 billion, Sacramento CA) supports financial literacy by offering an expansive debt management series. The online seven part video tutorials touch on various aspects of debt management including how to control spending, bankruptcy and how to actively attack and reduce debt. Members can also opt to attend a live debt management seminar that covers specific topics such as how to stick to a budget and how to pay yourself first.

Additionally the credit union offers a comprehensive online debt management calculator that allows the member to determine how to consolidate debt and credit card payoff.

UW Credit Union ($1.4 billion, Madison, WI) guides members through its BALANCE program, which is a free financial counseling program that allows the member to ask financial questions, review their credit report and develop a solid financial plan.

Drowning in debt and need a lifesaver? Before you make a move, find a credit union and inquire about its debt management program–it could save you from financial disaster.

Resources:

http://www.foxbusiness.com/personal-finance/2012/02/21/many-americans-living-on-edge-debt/

http://www.wgal.com/news/money/Drawbacks-to-using-debt-consolidation-companies/-/9360224/12570094/-/ptefbg/-/

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm

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There are several things youll need to consider when taking out a loan. How much you need to borrow altogether, how quickly you can repay the loan,
how much interest youll be charged: these are all important questions to ask yourself when thinking about a loan.

A debt consolidation loan is a specific kind of loan, designed to help give
people repaying multiple debts every month a simpler way of keeping on top of their borrowing.

But can you get a debt consolidation loan if you dont own your own home? We answer this question – and more about debt consolidation loans – here.

What exactly is a debt consolidation loan?

Its likely that at some point or another youll have seen or heard adverts on the internet, TV or radio asking you if you want to consolidate your
debts – often with a debt consolidation loan.

Consolidating your debts with a loan could only be a suitable approach if youre keeping on top of your
existing debts well and can afford your payments from month to month.

If youre in this position, and youre looking to make repaying multiple debts more straightforward, taking out a debt consolidation loan could be
ideal.

Its basically a loan big enough to cover your existing debts, so you only have one payment to one lender to keep track of every month.

You can find out more about debt consolidation here.

Why would I want to consolidate my debts?

There are various potential advantages to consolidating your debts with a loan – not least the fact that youll replace several debts with just one.

If you want your budget to be less squeezed on a monthly basis, a debt consolidation loan could also give your finances a bit more leeway, if you
arrange to repay the loan over a longer period. Although this could end up being more expensive in the long term (as youll have to pay interest for
longer too), making smaller monthly payments will mean your overall monthly expenditure will be lower.

Furthermore, unlike the majority of debt approaches, a debt consolidation loan wont have a negative impact on your credit rating – and in fact, if
you find it helps you to keep on top of your monthly payments, a debt consolidation loan could go some way to helping you protect it. As with any kind
of loan, however, you must be confident that you can commit to regular monthly payments until youve repaid the loan in full.

If youre not sure what your monthly payments might be, our debt consolidation calculator can help you.

Im not a homeowner. Can I get a debt consolidation loan?

You dont need to own your own home to take out a debt consolidation loan: as long as you have a regular income thats high enough and you can commit
to regular payments, you should be able to get a debt consolidation loan if your credit rating is good enough.

Just bear in mind that if you are a homeowner, and you decide to secure the loan against your home, youll be putting your property at risk of
repossession if you fall behind on your payments for any reason.

You can find out if you could qualify for a secured debt consolidation loan on this page.

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Many Americans continue to struggle with repaying debt and look to debt consolidation loans as the only option. Yet there are many other ways to reduce debt while maintaining credit and the little extras in life.

(PRWEB) May 08, 2012

As the numbers for consumer spending continue to tick upward, many Americans are noticing their debt growing, too. American Financial Solutions offers six tips to help eliminate debt and keep finances from getting out of control.

1. Create a spending plan. Cover all of your normal monthly bills and expenses as well as building in a cushion for the little extras you enjoy throughout the pay period or month. Then set aside an amount for two additional items: extra debt repayment and savings.

2. Snowball, avalanche – whatever name you choose, this method for paying down debt can cut years off of your repayment and it is better than a debt consolidation loan. Using the extra money you are setting aside for debt, you focus the payment on either the lowest balance debts or the debts with the highest interest rates. Focusing on paying down the accounts with the highest interest rates will save you the most money, but paying off debts sooner (lower balances) can be a fantastic motivator to stay on track.

3. Avoid borrowing to get out of debt. A debt consolidation loan may ultimately increase the amount of money you repay in interest. In addition, if the loan pays off credit cards, some people have a difficult time resisting using the cards again and can end up in double the debt.

4. Use cash only. This can be very helpful for helping to control areas of “leaky” spending. Set an amount of cash aside for impulse or fun spending such as dining out, lottery tickets, coffee, shoes, etc. When the cash is gone the spending stops until the next payday.

5. If you are someone who has difficulty sticking with cash, leave the credit cards at home. Instead take only the amount of cash you can afford to spend when you go out.

6. Talk to your creditors. Explain your situation and ask them to reduce your interest rates or allow you to make more flexible payments.

7. All of these tips rely on one thing: having additional money to put towards debts. The unfortunate reality is that many people are struggling just to make ends meet. If this is the situation, consider contacting a certified credit counseling agency. Credit counseling agencies offer numerous services and can help with resources such as:

• A debt management plan (DMP) – a DMP is very similar to a debt consolidation loan in that people have one monthly payment. The difference is that a DMP is not a loan. Instead it is a payment arrangement with creditors who provide benefits such as reducing interest rates, stopping late and over the limit fees, stopping collection calls and re-aging accounts so that they show as current rather than behind.
• Assisting in budget development
• Help in understanding credit and positive ways to develop or maintain credit reports
• Foreclosure intervention and assistance for people who are behind on their mortgage payments
• Pre bankruptcy credit counseling and post bankruptcy debtor education

Most services provided by credit counseling agencies are free. Always choose an agency accredited by the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

It is important to recognize that getting out of debt is usually not done quickly. Patience, time and perseverance are helpful qualities to have when working on eliminating debt. However, the lifestyle people establish during the process can be extremely rewarding. Imagine your money earned going solely towards the items important to you rather than towards interest and fees.

American Financial Solutions (AFS) is a non-profit 501(c)3 financial education and credit counseling agency that helps people find solutions for managing their money and improving their financial lives. Since 1999, AFS has helped individuals across the United States through one-on-one counseling, classes and the use of debt management plans. AFS is a member of the National Foundation for Credit Counseling (NFCC) as well as the Association for Independent Consumer Credit Counseling Agencies (AICCCA). AFS is also accredited by the Council on Accreditation (COA) and has an A+ rating by the Better Business Bureau. Find us and add us on Facebook, Twitter and Google+.

For the original version on PRWeb visit: http://www.prweb.com/releases/prweb2012/5/prweb9484259.htm

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You can consolidate unsecured debts in a number of different ways. You
may use a 0% interest credit card, a debt consolidation loan or a debt management plan. These methods work in different ways to help
people in different situations – and not all of them can freeze interest on your unsecured debts.

What kinds of debt consolidation can freeze interest?

Debt consolidation with a credit card

This involves finding a credit card that has an introductory period with 0% interest. This can be useful for consolidating your unsecured debts -
predominantly credit card debts – although there will be a balance transfer fee to consider.

Move all your different debts with varying interest rates onto the card, where they will all stop
accruing interest. As long as you make the minimum payment each month, you can pay your debt off as quickly or as slowly as you like. If you pay more
every month, the debt will be paid off quicker – and if you can pay it all off before the 0% period runs out, you wont pay any more interest on this
debt at all!

Its important to remember that if you still have money on the card after the interest-free period ends, it will begin to generate interest again. You
may therefore wish to move the balance from the card before the interest-free period ends if you cant repay it in time. Remember that its not
guaranteed that you will be able to get another interest-free card, as you will need a good credit rating, so be careful.

Want to know more about debt consolidation with a credit card? Click here.

Debt management

Debt management plans are not guaranteed to freeze interest on your unsecured debts – but they can do.

Debt management
works by striking up an informal agreement with your lenders which allows you to make smaller repayments towards your debts every month, since you
cant afford your original payments.

These will usually be made over a longer period of time. Interest can often be frozen if you (or a debt management company acting on your behalf) ask
the lenders to freeze any interest and charges on the debts. Its important to note that your lenders are not obliged to agree to freeze your interest
– or to accept the debt management plan at all. If they do freeze your interest, however, this should make it easier to repay your debts.

If your lenders dont agree to freeze interest, then paying back debts over a longer amount of time may mean you pay more overall. Debt management will
also negatively affect your credit rating.

If you are interested in knowing more about debt management, click here.

When doesnt debt consolidation freeze interest?

Debt consolidation loans

The idea behind debt consolidation loans is to take out a loan thats big enough to repay all your current unsecured debts at once. This usually makes
the repayment process easier by combining several different debts into one.

Although interest wont be frozen by a debt consolidation loan, it can be beneficial to replace many different debts with varying interest rates with
just one loan – hopefully, with a significantly lower interest rate. Just bear in mind that repaying that loan more slowly than the original debts
could still cost more in interest in the long run, even if the rate is lower.

Use our Solution Finder to see which debt solution could be right for you
.

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Their claims can be confusing to some consumers.

Debt experts offer the following advice on dealing with debt consolidation companies.

There is no magic bullet, said credit counselor Richard Musser. Its going take time. If you got yourself into a debt situation, its going take time to undo it.

Consumers can reach settlements with creditors for less than what they owe, but they pay a price, Musser said. Part of that price is credit reports having a remark on it that indicates that the zero balance is a result of paying less than what was actually owed.
That remark can severely damage a credit score.

Taxes can be levied on the amount of the debt that was forgiven.

The IRS also requires filers to claim that as income for the year the debt was forgiven.

To get out of debt and preserve a credit score, the best choice is the hard choice, said bankruptcy attorney Mitch Sommers.

You have to be willing to let go of things you dont need, Sommers said. Have that openness and willingness to let go of things.

Where can things be cut that are not needed? These are things that are luxuries or things that you want that youre used to having. You might have to change your lifestyle.

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Debts
of all kinds can be included in debt consolidation. If you want to bring down the
monthly cost of your unsecured debts likecredit cards, store cards, overdrafts, personal loans or any other form of unsecured borrowing, these debts can all be
consolidated with debt consolidation. In fact, you could even consolidate secured debts with a consolidation loan – its a question of whether it would be
worth it.

2 main ways to consolidate debt: secured and unsecured

Secured debt consolidation
involves adding debts (like credit cards) to your existing mortgage or taking out a secured loan.
Its only an option if youre a homeowner and you have enough equity in your home – plus, securing any debt against property does put you at risk of repossession if you cannot keep up with the repayments. However, you could seriously
lower the interest rate youre paying.

Click here to speak to a debt adviser about secured debt consolidation.

The other way to consolidate debt is with an unsecured debt consolidation loan (although you could use an overdraft or a credit card instead to bring
your debts together). If youre going to consolidate your debts into one this way, consider the APR of the credit before you do it. You want to make
sure youre paying an affordable amount of interest. Secondly, consider your credit rating and whether its
realistic that you could obtain further credit – if your credit rating is very poor, you wont find a good deal at a time like this. Finally, consider
the repayment period and whether you could afford to continue your repayments for the length of the loan – and remember that the more slowly you repay
the debt, the more itll cost in total.

More things to consider with debt consolidation

However, you pay interest on any debt consolidation loan – whether thats
secured or unsecured – so its only worth including debts that already charge interest.

So, debts you probably shouldnt include in debt consolidation are zero-interest or very low-interest debts – these might include an interest-free
overdraft, student loans or debts to friends and family.

Should I consolidate my debts?

You should only consolidate your debt if you know that you can afford the repayments and will be able to afford them for the full term of the repayment
period.

By slowing your payments down you could

save money

every month, but if you already cannot afford your repayments, another debt solution, like

debt management

, might be a more realistic option.

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Horizon Bank offers individuals the opportunity to consolidate their debt, simplify their monthly bill paying, and, in most cases, deduct the interest from their income tax returns.

According to Mike Foti, a Consumer Loan Officer, “Individuals who are ‘drowning’ in debt often have trouble making their monthly payments. In the case where they are only paying the minimum due each month, the total interest and the time necessary to pay off the debt seem like an uphill battle. What normally would take two years to pay off can more than double in time while the interest associated with the unpaid debt continues to escalate.”

Our staff may suggest a number of loan options to help our customers alleviate their debt problems. One option is a Home Equity Loan, also referred to as an “equity loan” or “second mortgage.” A Home Equity Loan – based on the difference between the homeowner’s equity and the home’s current market value – is a fixed loan amount available to help pay off your bills completely or, at least, pay off as much as possible. Most Home Equity Loans feature a fixed interest rate, which is typically substantially less than what you are currently paying on your credit card or auto loan.

Another option is a Home Equity Line of Credit – a form of revolving credit in which your home serves as collateral. Although the line of credit may be used for debt consolidation purposes, this product is best suited for long-term flexibility of borrowing and repayment.

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Happy that you need not carry loads of cash when you go out, and think life has become easier with your credit card since you swipe it every time during a visit to your favorite burger place or when you buy a new watch? Well snap back to reality, a cash credit is still a cash loan given until a certain period of time. This credit is valid and given on a promise that it will be repaid to the bank on or before mentioned time. Now one may ask what will happen if I don’t repay and bail-out? The answer is “credit card debt”. Money lenders, banks, etc., try to seek creditworthy people and offer them credit card, and if a credit card holder does not plan accordingly then debt is something unavoidable. When a person is buried in debt then how will he survive?

The question arises then do I need a credit card? If you are travelling or run short on money for the day’s emergency then what do you do? Moreover, in today’s fast-paced world being slow or not updated is unappreciated, so it is not a luxury but a necessity.  It is not a total loss if you know what you are doing or getting into. With a credit card, small short-term loans can be availed provided maximum credit line is not exceeded. And it is anti-fraudulent.

To attain benefit from your credit card and keep debt away, these points have proven to be useful.

• Ask and familiarize with the interest rates the bank levies on usage
• There is always a time-frame till the cash on the credit card has to be repaid. Know it, and keep a remainder to fulfill it in time to avoid high interest rates.
• Don’t drown in debt and become bankrupt.
• Some banks try to benefit card holders with attractive credit card offers like insurance facility. For example: car insurance, PPI, travel insurance, etc. Try making the best use of it.
• Getting a PPI Claim will help in case you are incapable of repaying the loan due to job loss, physically helpless for going to the job, etc.
• If possible pay a visit to a nearby financial advisor and know more in detail about your credit plans
• Know your income and control your expenditure.
• Credit card usage also has its benefits; for instance, you get to earn certain cash points that can be redeemed the next time you go for a purchase. Utilize such perks and benefits.
• Request a reduction in your APR (Annual percentage Rate) to lessen your credit payment. If there is a delay in the payment, the burden of interest will not be unbearable.
• If planning for a debt consolidation (taking an ample amount of loan to repay rest of the loans to reduce interest rate), then prepare to tackle the outcome. At any rate, it is only prevention not cure of the problem.
• There is nothing wrong in considering the advice of a credit counselor/counseling organization if you do not wish to drain out your financial assets at the end of the day.

Neo Zack is a Tech writer from London with an interest in topics relating to Insurance, Finance, and green living. You can follow him @financeport on Twitter.

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Even as Arizonas housing market begins to recover from its years-long slump, people desperate for a break on a loan still can fall victim to those who offer hope but dont deliver.

Call 12: Here to help consumers

Authorities warn that schemes promising financial assistance are evolving along with Arizonas housing market. First, in the depths of the market, came predatory loan-modification scams. Now, as home prices rise and foreclosures drop, a new wave of companies has emerged to target those who are desperate for financial assistance.

People who are trying to buy homes with questionable credit, to modify onerous loans or to reduce effects of foreclosure often end up paying thousands of dollars in fees to operators who fail to deliver promised services, authorities say.

Those operators can be home-office businesses with shoestring budgets. They can be sophisticated networks with offices in dozens of states. Consumer-fraud lawsuits and complaints show no matter how widely they differ, many deals are similar in one respect: They require an up-front fee.

And often, with an up-front fee, money is paid, but no service is rendered, authorities say.

Since February, when Arizona received $1.6 billion as part of a lawsuit settlement with the nations five largest mortgage lenders over allegations of fraud and abuse, Arizona Attorney General Tom Horne said his office has seen an increase in the number of complaints involving up-front fees.

Its getting worse now, Horne said. It is a terrible situation. The people in society who can least afford to lose money are the ones (criminals) go after.

Horne said many people, in Arizona and nationally, are charged fees for services that they could get for free through legitimate companies or on their own.

The real issue is the up-front fee, he said. There are questions of paying fees at all. But it is flatly illegal to charge a fee to modify a mortgage.

Questionable operations can run the gamut, from a small business promoting private loans that customers say never materialize, to a multistate law firm and a rent-to-own company that have drawn legal scrutiny. Some recent complaints are examined in this Call 12 for Action investigation.

Up-front fees for loans

Elizabeth Kingsley-Young, 57, runs a San Tan Valley firm called Insight Investment Group LLC that offers to help people with poor credit and previous foreclosures fund new-home purchases through private equity loans. All for an up-front fee.

Kingsley-Young promises to find housing for families with bad credit, bankruptcies and low incomes. On its website, Insight Investment offers residential and commercial financing, rent-to-own properties, no-money-down loans, housing grants and financing seminars.

Through its non-profit partner, Empowering Resources, the companys website says it offers hope and restoration in the lives of individuals and families affected by poverty or any of lifes other crippling obstacles.

However, Kingsley-Young has about 15 aliases, a criminal history dating back at least 30 years and has served prison time in Texas, California and Minnesota for fraud, counterfeiting and forgery, records show.

In Arizona, she has identified herself as a doctor, a lawyer and as having an MBA.

Kingsley-Young was born and raised in Texas. An investigation by The Arizona Republic found she has been hired as a bookkeeper, mortgage-company clerk, grant writer and non-profit manager; records show those jobs all ended amid allegations of fraud.

You cant judge somebodys present by their pasts, Kingsley-Young said in an interview in late April. This is a situation that has two sides.

She has not been charged with any crime in Arizona. In interviews at her home and by phone, Kingsley-Young declined to answer specific questions about her business or about any of her clients.

State records show neither Kingsley-Young nor her companies are licensed as mortgage lenders or real-estate agents. Her companies are also not registered as valid corporations in Arizona. And the IRS has no record of granting tax-exempt status to her companies, meaning they are not valid non-profits.

Kingsley-Young rents virtual office space at a building in east Mesa, uses a post-office box as her corporate mailing address and does most of her business out of a home near Ironwood and Ocotillo roads in Pinal County, records and interviews show.

An analysis of the Insight Investment Group website found that the biography of its president was picked up nearly verbatim from another companys website. Educational, vocational and property records searches found nobody living in the United States who matched the names and backgrounds of Insights listed corporate officers.

A $10,000 disappointment

Gilbert artist Koi Hatchootucknee said he paid Kingsley-Young more than $10,000 last year to secure financing for a barbecue restaurant he planned to build.

Its not just the money, Hatchootucknee, 56, said. She took a year of my life. … She took my time, my dream, my energy, my everything … my dignity.

Kingsley-Young declined to respond to Hatchootucknees accusations.

Hatchootucknee said Kingsley-Young instructed him to put together thousands of pages of financial information, including business models, tax returns and credit reports, among other documents. She had him draw up profit calculations, equipment valuations, even menus.

Hatchootucknee said on her instructions he hired contractors, real-estate agents and architects, met with city officials about building sites and negotiated property purchases.

He said it took him more than a year to realize that Kingsley-Young was drawing out the process. Every time it appeared they were close to finalizing a deal, there would be some kind of delay, Hatchootucknee said.

The last straw came in February, when Hatchootucknee said he was sitting in a title-company office waiting to close escrow on a Queen Creek property. The deal hinged on a bank transfer from Kingsley-Young, which was supposed to process at 2 pm

When 2 pm came and went with no money, Hatchootucknee said he filed a police report.

Late last month, after she had been contacted by The Republic, Kingsley-Young offered to repay him, Hatchootucknee said. He said he still intends to press his case with authorities.

You want something so bad. Thats what these people play on, he said, adding that he has given up on getting his money. This thing goes a lot further than me.

On her contract signature line, Kingsley-Young has identified herself as Dr. Liz A. Kingsley, MBA, JD, PhD.

In interviews, Kingsley-Young admitted that she is not a lawyer and does not have a law degree. She would not discuss her other credentials, but extensive records searches were unable to verify her MBA or doctorate.

Kingsley-Young acknowledged arrests and convictions on white-collar fraud charges in Texas, California and Minnesota since the 1980s. She also has a string of civil judgments and liens for unpaid state and federal taxes since 1994.

Up-front fees for modifications

Kingsley-Young focuses on financing. The Chicago law firm of Macey, Aleman and Searns has offices in 37 states, including Arizona, and it specializes in helping consumers with mortgage modifications, debt consolidation and bankruptcies.

The firm has racked up consumer complaints accusing it of failing to deliver services. The Arizona attorney general is accusing the firm of illegally taking up-front fees for mortgage modifications.

In a consumer-fraud lawsuit, the Arizona Attorney Generals Office in February said the law firm was using its legal status to end-run consumer-protection laws prohibiting up-front fees. A similar lawsuit filed last year by the Illinois Attorney Generals Office accused the company of illegally charging advance fees for debt resolution under the guise of legal services.

Jason Searns, the firms managing partner, denies any wrongdoing. He said the firm adheres to the highest ethical standards and that operations for both mortgage and debt-resolution businesses were rigidly vetted by experts.

Searns said that the law firm had a stellar track record and virtually no customer complaints before the first consumer-fraud lawsuit was filed. The firm has since gotten an F rating by the Better Business Bureau and has received hundreds of consumer complaints across the country.

Searns, a former prosecutor whose office is in Denver, said he believes the lawsuits have political motivations; he said his firm ran afoul of powerful banking interests by helping consumers negotiate alternatives to bankruptcies and foreclosures.

We were netting clients 29 percent savings on their debts, he said.

A 2010 ruling by the Federal Trade Commission, which regulates the mortgage-modification industry, requires significant disclosures and prohibits providers from taking fees from consumers before changing the terms of a mortgage.

An exception is made for attorneys as long as:

The attorney provides mortgage-modification services for clients.

The attorney is licensed to practice in the state where the client is seeking the modification.

The attorney has a face-to-face meeting with the client.

Horne said Macey, Aleman and Searns was using its law-firm status as a cover to charge fees. He challenged the firms claim that it hired local lawyers to represent clients.

They were using the subterfuge of a law firm. The lawyers were not really doing anything, he said. Here there was no lawyer-client relation.

In its lawsuit, Hornes office alleged that the firm, operating as the Mortgage Law Group, hired a proxy company to do all of the actual work for consumers, who paid up-front retainer fees.

The state maintained that the proxy company, Underwater Property Solutions of Scottsdale, guaranteed consumers that they would get mortgage modifications by hiring the law firm. It also falsely told consumers that the law firm could stop foreclosures and save them hundreds of dollars each month on loan payments, the state said in its lawsuit.

As part of a legal settlement announced April 26, Underwater Property Solutions will no longer be involved in debt or loan-modification services in the state. The company will also pay full restitution to consumers who filed a complaint with the Attorney Generals Office, as well as attorneys fees.

The settlement does not affect the ongoing lawsuit against the Mortgage Law Group, which Searns said his firm will continue to fight.

He described Underwater Property Solutions as a clerical firm hired for bookkeeping and paperwork. He disputed Hornes claims that local attorneys were mere figureheads used to avoid laws.

One clients allegations

Tempe resident Pearl Lee said she sought the Mortgage Law Groups help last year to lower her monthly payments and ended up threatened with foreclosure on a house she had lived in for 21 years.

Lee, 62, who co-owns and operates an assisted-living center in Phoenix, said she agreed to pay the firm about $4,100 before representatives agreed to take her case. She said the payments were deducted directly from her bank account in installments.

Records and contracts show that Lee hired the law firm in September. She said that the firm guaranteed her a new mortgage with a principal reduction of nearly $100,000.

At the time she hired the firm, Lee said she was current on her mortgage. She said the first instruction she received was to stop making her mortgage payments.

She said she filled out the forms and faxed all of the requested financial documents. Lee said three months went by, during which she continued to receive notices from her lender for failure to pay.

She said she made repeated calls to the law firm and first was told that part of her application had been lost and would have to be resent.

By December, Lee said she was in a panic over the threat of foreclosure. But she said she could not get through to firm representatives.

Nobody got back to me. … I didnt know what to do, she said.

Lee said she researched the firm, contacted its headquarters in Chicago and demanded a full refund.

Ultimately, Lee said, the firm agreed to return a portion of her money. She said a firm representative told her that because representatives did substantive work on her behalf she was not entitled to a full refund.

In March, Lee said, she received a check for $2,955.

She questions whether the firm ever intended to help her with her mortgage, which she is now struggling to repay.

Searns, who said the firm would not address specific cases, said clients were dealt with fairly and honestly and that his firm was committed to representing them.

Up-front fees for rent-to-own

Up-front fees for loans and loan modifications are simple transactions. In more complex cases, some people facing foreclosure have agreed to turn over title to their homes and lease them back in deals that they believe one day will allow them to buy back their homes.

Bella Homes, an Atlanta-based company run by Scottsdale resident Mark Diamond, told homeowners in Arizona and other five other states that its program would allow them to avoid foreclosure, stay in their homes, save money and ultimately finance their repurchases.

A joint lawsuit filed in February by the Colorado Attorney Generals Office and the US attorney for Colorado alleged that Bella principals bilked homeowners out of nearly $3 million that they used for personal expenses in a nationwide foreclosure-rescue scam.

In March, as part of a consent decree, Diamond and other Bella principals admitted defrauding homeowners.

Neither Diamond nor any other Bella representatives could be reached for comment. In addition to running Bella Homes, Diamond is president of a retirement-planning services company in Scottsdale.

According to the federal lawsuit, from March 2010 until February this year, Bella defrauded as many as 450 homeowners. The lawsuit said company representatives persuaded desperate homeowners to turn over title to their homes and enter into three-, five- or seven-year leases.

As part of its program, owners had to pay Bella up to three months rent in up-front fees once they transferred the title.

Bella Homes admits that it has not purchased any mortgages and lacks the financial capacity to purchase mortgages, the federal lawsuit stated. Because neither Bella nor the homeowner pays the mortgage, the home is inevitably foreclosed … and the homeowner is ultimately evicted.

As part of a consent decree, Bella principals are prohibited from participating in any mortgage or real-estate business in the United States, agreed to release $707,726 to the government and agreed to pay $497,500 in restitution.

Up-front fees in the future?

Now, operators may be focusing on trying to cash in on the $25 billion settlement with the nations largest lenders, Horne said.

The Arizona attorney general is warning consumers to watch out for companies contacting them about the settlement. People who are eligible for part of the settlement will be contacted directly by one of the five major lenders involved — Bank of America, Citigroup, the former GMAC (now known as Ally Financial), JPMorgan Chase and Wells Fargo.

Only borrowers with loans owned by the five lenders involved are eligible for aid from the national settlement, and those lenders are responsible for contacting eligible homeowners in the coming month to offer assistance.

Investigate the company making the pitch and be wary of offers providing faster assistance or guaranteeing better results, Horne said.

But in any case, dont offer cash up front, he said.

Horne advised consumers to contact his office or a bank before paying up-front fees for financial assistance, particularly if the fee is tied to mortgage relief.

Protect yourself from potential fraud

Here are tips to guard against real-estate fraud.

Be wary of:

Companies that demand up-front fees. Most legitimate operations dont charge in advance for financial assistance. Arizonas Foreclosure Consultant Statute prohibits loan-modification consultants from charging fees in advance.

Companies that tell you to stop making mortgage payments. And never make mortgage payments to any entity other than your lender or servicer.

Companies that say you cant be evicted during the process of establishing a new loan.

Companies that guarantee they can stop foreclosure.

Companies that offer to take over your house payments and then lease the house back to you, promising that you will be able to buy back your home at a later date.

Anything from a company offering help that has blank lines or spaces. Information could be added later that you wont know about.

Investigate the company:

Check to see if it is registered with the Arizona Corporation Commission. Companies are supposed to be registered to do business in the state. starpas.azcc.gov.

Check to see whether a potential lender is licensed with the Arizona Department of Financial Institutions. www.azdfi.gov.

Check to see whether a company or person holds a valid real-estate license with the Arizona Department of Real Estate. www.re.state.az.us.

Check federal and state court records to see whether a company or individual has been sued or convicted of a crime. Federal court records also can be used to check if an individual or company ever has filed for bankruptcy.

Conduct a Google or other Internet search on a company or individual. google.com.

Seek help from the state:

Call Arizonas foreclosure help line at 877-448-1211 or go to www.azhousing.gov.

Sources: Arizona Attorney Generals Office, Arizona Republic research

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