Comments on: RALs

By: www.taxproblem.org

www.taxproblem.org — Mon, 19 Jul 2010 17:48:30 +0000

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By: Rob

Rob — Sat, 08 May 2010 03:59:59 +0000

If everyone was forced to prove their EITC claims all in one year, the banks providing RALS would all go under and thats not a maybe that is a absolute fact!!!! Even if the approval rates were only at 50 percent that year on RALS the Banks would be stuck loosing more money than getting paid for effectivley doing away with the product and possibly bankrupting some banks

By: Rob

Rob — Fri, 07 May 2010 20:56:46 +0000

From what I know being in the industry the typical EITC Fraud is 3000 plus so a bank being stuck not getting repaid on one of those is huge. Typical interest on a loan like this is about $100 so to get back to even the bank has to be paid on 30 additional ones just to break even and no banks is in business to break even. With fraud being so high and the risk of the IRS cracking down at any moment the Banks risk is huge. Its not minimal as suggested by this article or most activist groups.

By: Rob

Rob — Fri, 07 May 2010 20:52:05 +0000

The key point in this article and one that is glanced over very quickly as usual is the fraud risk associated with RALS. The fraud risk has become a bigger risk than DI risk. I do not think they have accurate numbers because if they produced them the outcry would be tremendous but my guess is 40 percent of EITC claims are fruadulent in one way or another. The fraud costs to our governement far surpasses what is being charged for RALS and is a very huge concern when banks make these loans.