Private Equity Firms Are The New Predatory Lenders: Report

When he was Treasury Secretary, Timothy Geithner excoriated payday lenders. But five years since leaving his Cabinet post, Geithner heads a firm that makes millions from lending money at sky-high interest to cash-strapped Americans, according to a Washington Post investigation. Mariner Finance, a division of Warbug Pincus, "enables some of the nation's wealthiest investors and investment funds to make money offering high-interest loans to cash-strapped Americans," according to a Washington Post investigation. Mariner is a division of Warburg Pincus, a private equity firm where Geithner is president.

Mariner is not the only big money firm in the short-term lending space. But it uses a novel method to snag customers that its competitors rarely do. 3,000, Peter Whoriskey, the Washington Post reporter on the story, told CBSN. All the person has to do is sign the check to accept it.

Once they do that, they're on the hook for interest rates up to 36 percent, as well as additional fees if they don't pay. 1,200 last year. It immediately aroused his suspicions, he told he Post. Stephen Huggins. The following week, however, Huggins was short on cash to pay for needed repairs to his truck—so he cashed the check, signing up for 33 percent interest.

536.88 for Mariner's lawyer. Mariner has about 500,000 clients, the Post reported, most of whom have credit scores in the "fair" range. That means they might have a harder time qualifying for a bank loan, making them attractive targets for nontraditional lenders. And it's not illegal, he added. Even though Mariner sometimes loses money—about 8 percent of its loans are written off, compared with 1 percent to 3 percent for commercial banks—its high interest rates mean the operation can be hugely profitable, the Post reported. Editor's note: Mariner Finance disputed elements of a July 9, 2018, CBSN segment featuring Washington Post business reporter Peter Whoriskey discussing his article about the company's lending practices. Click here to read the company's statement.

Make sure the creditor reports your history to the bureaus. And beware of those with very high fees. Get a private label retail credit card. “Many retail stores offer low limit credit cards that have a low barrier to entry,” Hernandez suggests. Obtain a credit card as an authorized user on a parent’s account. “Or, consider having a reliable person co-sign with you for your own card,” says Ross.

Apply for a small credit building loan from a bank. “Local institutions are often more likely to extend credit to those with little to no credit history. Acquire a small loan for an item you already have money available for in another account. This way, you’ll be sure to repay the loan in a timely manner,” Ross notes. Don’t apply for too many credit cards, loans or lines of credit in too short a time. Your credit score may decrease with each new credit inquiry. Use these cards and loans.

It’s not enough to simply open the accounts. Use the credit, but don’t exceed your credit limit. Make credit payments on time. “The more recent a missed payment, the more it hurts your score,” says Smith. Pay off all or most of your balance each month. “Don’t just pay the minimum amount. Ideally, you want your balances to be about 30 percent or less than the total available credit line,” Smith notes.

Check your credit report. Request a free copy at com. Review it carefully for any errors. Dispute any credit report errors you find with the three credit bureaus. Don’t expect to see or grow a credit score quickly. “Once you establish credit, it takes six to 12 months to generate a credit score,” says Michael P. Goldrick, chief lending officer for PCSB Bank. If you can’t wait that long to apply for a mortgage, try loan shopping. You may get turned down.

Or you may get approved but have to pay a higher interest rate. “It’s rare. But we’ve approved loan applicants without credit scores,” says Goldrick. In these cases, a lender may review payments to utility companies, landlords and insurance providers. They may also require you to have a co-signer on the loan. Erik J. Martin has written on real estate, business, tech and other topics for Reader's Digest, AARP The Magazine, The Chicago Tribune and his blog, Martinspiration. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

Ultimately, it's cheaper for creditors to keep their existing customers than it is for them to acquire new customers, so it's in their interest to work with you, regardless of your credit score. If you take anything away from my personal story, let it be this: When in doubt, ask your creditor. The worst thing they can say is no, and there are far worse things in this world than that.

June's best offers for borrowers with the best profiles (the 95th percentile of borrowers) had an average APR of 4.34% for conforming 30-year fixed purchase loans, down from 4.36% in May. Refinance loan offers were up 1 bp, to 4.37%. We consider people with the best credit profiles to be those who received the best mortgage offers through the LendingTree platform.

Mortgage rates vary depending upon parameters including credit score, loan-to-value, income and property type. For the average borrower, purchase APRs for conforming 30-year fixed loans offered on LendingTree's platform were up 8 bps, to 5.00%. The loan note rate of 4.89% is the highest since March 2016 and was unchanged from May.

We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates. 65th percentile of borrowers) saw offered APRs of 4.86% in March, versus 5.14% for consumers with scores of 680-719. The APR spread of 27 bps between these score ranges was down 2 bps from May.

231,606. The additional costs are due to higher interest rates, larger fees or a combination of the two. Refinance APRs for conforming 30-year fixed loans were up 11 bps, to 5.00% for the average borrower. Lifetime interest paid is calculated based on the overall average loan amount to enable comparison. Lifetime interest paid is calculated based on the overall average loan amount to enable comparison. Each week LendingTree also releases its Mortgage Rate Competition Index and Mortgage Savings Tracker.



The LendingTree Mortgage Rate Competition Index is a new measure of the dispersion in mortgage pricing. Built on top of the Mortgage Rate Competition Index, the Mortgage Savings Tracker brings transparency to mortgage shopping by highlighting the significant savings that are available to potential borrowers for both purchase mortgages and refinancing.