Friday, April 24, 2009



I’ve been noticing over the last few years that large business is actively calculating how much they can milk a consumer, leaving them just enough money to get by and still survive to milk again.

Not just the banks and credit card companies, but all large business. Verizon screwed me last year for 4k. Come to think of it its all companies that engage in credit reporting.
There system is set up with mass phone networks and they make, complaints and billing disputes as difficult to resolve as possible. There system is designed so there phone operators have no accountability and in the end it comes down to; paying them or they slam your credit report. These fuckers are professional liars they spend all day on the phone and develop skills to talk in circles or my favorite is when they say they will take care of it and call you back….. The call never comes.

Case in point:
Verizon Wireless, they have stores all over the place, even here in Montana, most the small towns have one. You can buy a call plan, antenna, and any accessory. You can even pay your bill. You cannot dispute charges or resolve complaints there. You would need to discuss that with an ignorant mystery operator several states away.
This is structured to avoid accountability.

Banks are the worst, these people have all day and vast recourses to calculate ways to rip off consumers. They are restructuring loans coming up with angles to move you into different rates (some times bulling). They are engaging in predatory lending.

Here is how the BANK scam works:
This is just figures of the cuff but there still accurate.
John Doe has a mortgage for 50k @ 10% for 30 years. He’s had the mortgage for 10 years.
Mr. Smith (crook rat fuck bastard) at the bank says that he can give Mr. Doe a Mortgage for half the rate @ 5%.
Mr. Doe agrees since paying only 5% is surely better than 10%.
Mr. Doe just got fucked and doesn’t know it.
I will explain later.

My belated conclusion:

The basic loan scam is achieved by “front loading” ; thus the interest is paid up front. The bankers are aware that most people are ignorant and un-willing to compile facts and crunch the numbers.
The entire lending system is based on deception to maximize profit and exploit the consumer.
Federal lending law requires that the lender disclose the so called “truth in lending” (this was our friend the government stepping in to offer a false censes of security). This will only offer a consumer the total amount of THIS loan with interest. It will NOT show the consumer the loss of, vested loan activity ,or compare your prior payments paid to interest. To re-phrase; now stacking your past payments to an entirely new loan and starting all over with A “front loaded” loan. I’m not attempting to suggest that we need more federal regulations, only to point out that Bankers are, “taking us for ride“.

Lending is based on forms of “amortization” this re-payment system is designed to deceive the consumer. An extreme version of this, is our recent problems with the Derivatives market (amortization, interest, deception on steroids). With the advent of programmable calculators and home computers amortization is a “snap”. Internet access, offers amortization schedules for any given situation; still few people invest the time to research the “vested costs” lost when refinancing. Its no mistake these schedules are complex. They were designed by lenders prior to computers. They’re purpose : increase profit by directing funds away from equity.

The derivatives market is there newer bag of tricks, it’s a method of assessing value by using debt as an asset then selling debt. needless to say, amortized debt has increased there derivatives values. It’s fair to note that a Derivatives scheme (scam) is so complex that only high performance computer networks are capable of calculating there complexity (are you noticing a pattern of masking truth by complication).

You may remember in the years prior to our “economic down turn” the lenders were scrambling to get you to refinance and there favorite was “debt consolidation” and “new low interest rates” Remember this? They ran commercials and adds, telling you refinancing was the prudent thing to do. They didn’t tell you it was only prudent for them. Consumers fell for it “big time” trading unsecured debt, for secured debt. There homes were the bargaining chip. With increased home values, some even left closing with cash! The banks were so desperate to cash-in, then cash-out on Derivatives “futures”, second mortgages were common place. Perhaps its poetic justice; the banks didn’t realize there up-side-down pyramid was going to tip and threaten to collapse.

The borrowers hurt worst in this bank scam were in there mortgages 6-15 , +, years old, With front loading, Vested payments lost, even if you were paying off higher interest credit cards with refinancing the numbers don’t work.

50 thousand @ 10 % for 30 years: 448.05 per month
12 months x 30 years = 360 payments x 448.05 = 161,298.00 So you will pay over three times
the amount borrowed.

10 years in-to loan 53,766.00 paid (vested term) now most of this is interest paid to the bank. You will start to see a notably larger portion of your future payments going to principle. Then after 15 years a larger portion goes to principle than interest.
If you fall for the bank scam and refinance you are starting out with a debt the same size as you had 10 years prior, your vested term to front loading will start at the beginning of the load. Now with a new, lower rate ,on the new loan, your payments will go to basically interest only for the next ten years. Result; you paid more money and added 10 years to your payments.

Below is an example of a 5% loan compare the total amounts of each loan. Most people were refinancing to 1 or 2 % les If there payment history was more than, say 4 years, the (front-load) starting over they lost all there prior payments, and there vested term of amortization.

50 thousand @ 5% for 30 years: 268.41 per month
12 months x 30 years =360 payments x 268.41= 96,627.6
So you see the credit will cost you nearly twice the amount borrowed.

I’ve only scratched the surface of this topic and this is in no way a definitive report. This topic is so complex (as banks intended ) most people in the lower ranks of lending don’t comprehend its enormity. Most loan officers don’t fully understand its complexity, there only pushing the loan for there commission (or points system) for closing a loan. If you recently refinanced find a program on-line to calculate a loan compare; equity, and interest paid, be mind-full of the terms paid verse new terms.