The Mortgage Banker’s Association, unable to make good on its mortgage, has entered into a short sale on its commercial loan outstanding on its Washington, DC headquarters.  The MBA is selling to CoStar for $41.3 million, a sum far short of the $75 million in debt that they took out in 2007.

The MBA announced their intentions back in October to sell 1331 L. St. because they couldn’t make payments on their $79 million headquarters. The MBA had a whopper of a mortgage – a variable-rate loan mortgaged at 94.9 percent (more…)

No kidding.  I spent about 40 minutes on the phone this morning, and I think I understand it.  Last night I spent about 40 minutes learning how to apply a buffer around a vector, then create a new layer, in order to analyze geospatial data.  The Block Emerald Advance is roughly as difficult.

My review of this card is that affords a low-cost line of credit, when evaluated from a long-term perspective. At the same time, it is hard to spend your money.  This account is best for someone who wants to establish a line of credit and then make minimal payments to it over time, without actually spending any money. There are people who would gain utility from such an account. Anyone who wants to embark on an effort to restore their credit would be able to find a satisfactory option, given the alternatives, through the Emerald Advance.  At the same time, the account has a complex fee structure. If you are late on your payments, you will incur a lot of additional fees. Its an account that you want to maintain in good standing.

The card’s structure is actually split into three different elements. There is a line of credit, a spending account (the “Spend”, and a savings account. The savings account pays interest, and the line of credit costs interest.

Consumers can open the account with an initial deposit. The account opening fee is $45. That fee is characterized as (more…)

Republic Bank (RBCAA) is an example of a bank that works hard to make its customers work hard.

Some observers naively examine the low rates of loan defaults on Republic’s home mortgage loan operations and assume that it a conservative small-town community bank. Hoover’s, a web site operated by Dunn & Bradstreet, makes this comment:

“…perhaps you bank at Republic Bancorp. It’s the largest Kentucky-based bank holding company, and parent to Republic Bank & Trust, which has about 40 branches in central Kentucky and southern Indiana. In 2006 the company entered Florida, where it has four branches, via its purchase of Tampa’s GulfStream Bank, since renamed Republic Bank. The banks offer checking and savings accounts, investment management, and trust services. Their lending activities mainly consist of residential mortgages (about half of the company’s loan portfolio) and commercial real estate loans (almost 30%).”

A closer look shows that Republic’s community banking is driven by fee income on overdrafts. Outside of its (more…)

CompuCredit’s house is on fire, and it is throwing its payday lending business out the door.

CompuCredit is an Atlanta collections and consumer finance company that markets subprime products. Its product lines have included credit cards, and payday loans (pejoratively called micro-loans), along with collections on those kinds of products.

CompuCredit claims to target the 43 million (about 27 percent) Americans with a credit score below 650, as well as the 50 million Americans with no credit score at all.

They keep that sub-prime work in house, for the most part.  They provide Emblem, Embrace, and Majestic credit cards.  Not only do they provide subprime credit, but they also operate a “debt recovery” (collections!) through their subsidiary, Jefferson Capital.

CompuCredit has decided to sell its payday business.  It announced in a recent filing that it will spin off its (more…)

The Federal Trade Commission says it is prepared to hold for-profit universities and vocational schools accountable to their students.

A new draft, not yet law, has emerged from discussions on the negotiated rulemaking on Program Integrity. The new rule is focusing on how to define “gainful employment,” with the intent of making sure that consumers (students) are not given a false impression of the benefits of an education.  With that is a concrete provision to link the income of graduates with debt loads. The FTC, along with the Department of Education, are working to make sure that people are not graduating with more debt than they can reasonably afford on the income earned from their new degrees.

The idea is that debt service for recent graduates should not exceed 8 percent of income. There are a few caveats:

Repayment is calculated based on average salary. If Shaquille O’Neal is among your graduates (Univ. of Phoenix, MBA, 2005), then his salary could be counted. I say could be, because it would only count if you had a major offering in basketball. Graduates must be working in the field that they studied. Culinary students working in record shops are not relevant. MBA’s working in professional basketball – not relevant.

For example, if recent nurse assistant graduates earn an average of $30,000, then schools would be penalized if those graduates had an average debt load that was above $17,500 (assuming a 6.8 percent interest rate on unsubsidized Stafford loans) or $19,300 for subsidized Stafford loans (4.5 percent in 2010-11).

Schools were to demonstrate at least a 75 percent repayment rate on loans among graduates.

The rule only applies to graduates, and only to those students from a select set of institutions. Nonetheless, these for-profit and vocational schools are important.  The University of Phoenix is the largest college in the United States.  A recent estimates finds that it has approximately 500,000 students.  Even so, most of (more…)