Archive for April 30, 2015

Credit Checkup: 3 Tips as You Get Ready for a Home Loan

2. If Its Too Good To Be True, It Probably Is

Sometimes getting a home loan is about whatnotto do.

Builders and hard-money lenders often offer balloon notes to buyers with bad credit, says Christine M. Magee, a consumer law attorney in Dallas. Balloon notes allow the borrower to pay only interest for a set period of time; at the end of the term, the entire principal must be paid in full. The idea is that youre buying time to refinance your mortgage with a traditional lender before the balloon note matures.

Two of Magees clients, a young married couple, bought their upgraded dream home with a balloon note financed by the builder at 14 percent interest with a two-year maturity date. Even with high student loan debt and some unpaid accounts dinging their credit scores, the two said they were reassured by the builders title agent that theyd be able to improve their credit and land a new loan by the end of those two years.

Life got in the way, and they werent able to pay off all the delinquent accounts, says Magee. After two years of making mortgage interest payments, the amount due on the balloon note was $215,000 and the couple faced possible foreclosure.

There is no substitute for hard work and patience, says Magee. I have seen many success stories of those who worked hard at rebuilding their credit so that traditional banks would offer them loans.

3. Its Not Just Your Own Credit Score That Matters

Your partners credit score can negatively impact your ability to get a home loan as well, no matter how stellar your own score is.

In the case of one couple, she had excellent FICO credit scores of 745 but he had been irresponsible early on in life and had collection accounts from college credit cards he defaulted on, as well as limited positive credit, says Tracy A. Becker, president of North Shore Advisory, a credit-counseling firm in New York.

As a result, the couple couldnt qualify for a mortgage.

Becker says she helped him dispute some of the entries he said were incorrect on his credit reports. He applied for a secured credit card and opened a card with his wife, and took several other steps to improve his credit score.

In this case, Becker says, the mans credit score went from a 580 to a 680 in nine months and they were able to get the financing needed for their first home.

Silicon Alley Rising: New York Startup Funding Applications Trump The Long …

In the Q1 of 2015, for the first time New York edged out California in total number of startup funding applications. Quarterly data from Gust, the online platform for the professional angel investment industry, shows that Silicon Alley had a 22% increase in funding applications for the first quarter of 2015, propelling the rapidly growing startup hub past its long-reigning Silicon Valley counterpart. Elsewhere in the startup and angel investor ecosystem, the total volume of funding applications across the globe jumped nearly 7% over Q4 of 2014.

New York’s early stage industry owes its growth to a combination of economic dynamics and a string of fruitful public-private partnerships driven at the state and local level. As technology continues its rapid advance into every facet of every industry, New York has leveraged its traditional role as the world capital of business into becoming an emerging center of so-called “hyphen tech.” Along with its traditional Fin-tech (financial) and Ad-tech (advertising) industries, the recent emergence of fashion-tech, food-tech, retail-tech and the emerging ‘maker’ market have made New York a destination for entrepreneurial startups.

Last year, New York’s Governor Andrew Cuomo launched an ambitious Start-Up New York program that provided 100% tax breaks for new startups all across the state, including a 100% tax rebate for the income tax paid by new startup employees. In New York City, Mayor Bill de Blasio launched Digital.NYC in partnership with IBM, a comprehensive online hub for the City’s startup and technology ecosystem that brings together every company, startup, investor, event, job, class, blog, video, workspace, accelerator, incubator, resource and organization in New York’s tech sector.

California and New York jointly account for a larger percentage of total funding applications in the US market over Q4 2014, pointing towards strong overall growth on the coasts. Elsewhere in the United States, Florida remains a strong contender in the tech startup arena despite a decline in the state’s share of funding applications during the quarter. New Jersey, led by a growing startup center in Hoboken and Jersey City, also broke into the ranks of the top ten states with the most funding application requests.

On the global level, the United States remained #1 with a 5% increase in funding application share over Q4 2014. In a show of continued activity, India, whose startup industry has been growing steadily at least since Q3 2014, broke into the #2 spot replacing France. Israel and Finland also saw considerable gains over Q4 levels, moving them into the Top 10 at the #6 and #10 spots, respectively. Internet Web Services and Consumer Product amp; Services remained the two most popular industries for funding application requests across the globe. Startups with market-ready products and those in the development stage continued to lead with the most funding application requests. However, startups in the “Idea Stage” saw a 13% increase in funding requests, a trend carrying over from the previous two quarters.

Entrepreneurship continues to grow both in the United States and abroad. The persistence of entrepreneurs coupled with new investments in infrastructure supporting startups is helping shape where and how technology growth is occurring. New York’s movement toward parity with California is an example of how smart public investment can help technology move into traditional industries, and is potentially a harbinger of other traditional business centers leveraging their historic resources into a technology-enabled future.

Video contest for college students offers cash prizes: Plain Dealing

When consumer groups announced a video contest for Cuyahoga County college students last month, something big was missing.

Prize money.

The Cleveland Consumer Action Network says it just securedfunding for cash prizes for local college students who make thebest 60-second consumer video.

The First Prize winner will receive $300; Second Prize, $200; and Third Prize, $100.

Eligible videos must tackle topics such as identity theft, cybersecurity, responsible borrowing (including limiting student loan debt) or scams affecting college students.

Students enrolled at Baldwin-Wallace College, Case Western Reserve University, Cleveland State University, Cuyahoga Community College, John Carroll Universityor Notre Dame Collegeare eligible to enter.

Videographers, who can compete as teams or solo, should include at least three tips to help college students avoid money troubles or privacy issues.

Need to find scams affecting college students? My suggestions:

  • Fake check/employment scams. These scams involve bogus remote employers who send advance checks and then ask victims to forward part of the money to a third party. People dont know their bank may make funds available – conditionally — before the check clears the issuing bank. Victims forward money as instructed, but their bank discovers the check is counterfeit and takes its money back, the victims are held liable by the bank for any money they spent. Its an expensive scam.
  • Card cracking. People contact students via social media or in person at clubs and say they have checks to process but dont have a bank account. They ask students for use of their bank accounts and offer them half of the checks value. The bad guys give the unwitting students counterfeit checks to deposit, quickly withdraw their half when the money appears in the students account and then are nowhere to be found when the bank discovers the check is bogus and takes back the money. Just as in a more traditional fake check scam, the student is left owing the bank. In some variants, bad guys convince students to share their account number and PINs – which can put tuition reimbursements at risk.

Dont like those? Choose from CCANs list of juicy scams, online privacy issues and other eligible topics. And dont worry if youre not an expert. The rules provide plenty of resources for researchingatopic that appeals to you.

  • Entries are due July 5.
  • The Top 10 finalists, determined by CCAN, will be posted on the Greater Cleveland Better Business Bureaus Facebook page in September.
  • From there, its a popularity contest. Winners will be determined Oct. 5 by the number of likes and shares.

Find contest rules and resources at bit.ly/ccanvidcon15

Gateway Pride

To spur that change, and as a testament to Columbia Falls being poised on the cusp of a potential renaissance, civic leaders and entrepreneurs are stepping up and standing in solidarity to promote the community.

Don Bennett, president of Freedom Bank in Columbia Falls, recently launched the Gateway Pride Project to help local businesses improve storefronts and enhance the appearance of the community.

The bank is offering unsecured loans of up to $5,000 with zero percent interest, no fees and a flexible, four-year payment schedule. The bank set aside $200,000 to facilitate the program, Bennett said, and recipients receive a 10 percent discount from Hanson’s Hardware and a contractor’s discount from Columbia Nursery for project materials.

“We’ve got about eight businesses that have indicated they are willing to take part in the program. It’s really been taking off and turning into a buzz in the community,” Bennett said.

Bennett launched the project as an incentive for business owners to give the downtown core a facelift and embark on outdoor improvement projects throughout the canyon, as far as West Glacier, a concept that plays to Columbia Falls’ brand as the “Gateway to Glacier National Park.”

The downtown area has already had some upgrades in the past year, with Xanterra Parks and Resorts – the concessioner for Glacier National Park – moving into and refurbishing the old First Citizens Bank building, converting what was previously a prominent gap in the community corridor into an active business.

City officials are also developing an urban renewal plan that would include a tax increment finance district, which is a mechanism used to spur economic redevelopment. If established, the TIF district would allow the city to direct property taxes that accrue with new development to urban renewal or redevelopment activities. Kalispell and Whitefish have successfully established TIF districts to help fund sizeable revitalization projects.

Two new auto stores – Auto Zone and O’Reilly’s – have also taken up residence on US 2, resulting in a $1 million tax base increase for the city.

Darin Fisher is preparing to open a new microbrewery in Columbia Falls, called Backslope Brewing, with plans of opening in July or August, and The Palette Cafà will relocate to the new building to serve lunch and dinner. The Three Forks Grille also expanded, adding an old-style Italian deli with paninis, sandwiches, and specialty meats and cheeses. Up the road, Basecamp Cafà has been slinging breakfast downtown, while the new Teakettle Cafe is offering Asian cuisine.

Rep. Zac Perry, D-Columbia Falls, grew up here, and when the freshman legislator returned home from Helena after the Legislature’s transmittal break he said he was amazed at the new developments.

“I was in awe of all the positive developments taking place,” Perry said.

Lendit 2015 Recap: Online Lending Innovation Beyond Just Student Loans

Last week, I had the pleasure of attending LendIt, the largest annual conference about online lending, and participating as the moderator of a panel about the student loan market. During the conference, I saw a lot of great presentations about the industry. The following are just a few of my favorite slides and stories.

Why the online lending market has emerged

Former Secretary of the Treasury Lawrence Summers included this slide that shows the growing spread between short term unsecured loans and treasury yields. This has likely made it possible for online lenders including Lending Club, Prosper and other similar lenders to enter the market with very competitive rates and increase their customer base.

How online lenders compete in the market

Former Administrator of the US Small Business Administration Karen Gordon Mills showed the relative strengths and weaknesses of banks vs. online lenders. As the chart exemplifies, banks have significant advantages with respect to low cost of capital and large pools of existing customers, but online lenders have been able to grow as the result of innovations in customer experience, underwriting models and less regulation.

How far the market has progressed

Ron Suber, President of Prosper, demonstrated how quickly the growth rate of online lending has been in the last two years, outpacing both the Samp;P and smartphones. As conference founder Peter Renton pointed out, this growth has resulted in US online consumer and small business lenders doing an estimated combined $14 Billion in loan volume in 2014 with projected growth to $32 Billion in 2015.

Whats to come in the near future

Lending Club CEO Renaud Laplanche showed that despite its growth over the last several years, marketplace lending is still just a drop in the overall US Consumer and Small Business Lending Market bucket.

The excitement about the evolution of online lending as well as the profound growth and innovation in the space at LendIt was palpable. This trend is broadening consumers options and better addressing their needs, which will fuel continued growth in the space.

To learn more about the student lending industry and how to save thousands by refinancing your student loans, visit Credible.

UAE small businesses want to convert pricey loans into business mortgages

Small businesses are looking to roll high-interest post-crisis unsecured loans into commercial mortgages as banks ramp up their commercial portfolios and interest rates remain low.

The number of mortgages taken out on offices and warehouses in Dubai and Abu Dhabi has rocketed over the past year as small businesses refinance or buy their own premises, according to one Abu Dhabi lender.

Abu Dhabi Finance (ADF) reported that it dealt with a 60 per cent increase in its commercial mortgage portfolio between the first three months of 2015 and the same period last year.

The Mubadala-owned lender, which specialises in lending to small businesses and homeowners, said that the growth had come from an increase in the number of SMEs buying or refinancing commercial premises, pushing its average commercial loan size down to Dh1.8 million.

ADF said that it expected its commercial mortgage portfolio to grow in the whole of 2015 to about Dh300m, rising from about Dh150m last year. The lender is currently offering about three to five equity release commercial mortgages a week, mostly for warehouses in the Dubai free zones.

Free zone rules mean that until a property is 50 to 75 per cent complete you cannot register a mortgage on it, so the company must own it itself or obtain an unsecured loan to build it.

#x201c;Partly what we are seeing is a shift from short-term unsecured finance. What we think happened was that during the last downturn, to keep their businesses going, many SMEs had to take short-term unsecured finance at high rates,#x201d; said Chris Taylor, the ADF chief executive, speaking at Cityscape Abu Dhabi.

#x201c;The ones we are dealing with now have come through that, but they are still sitting with some legacy fairly short-term expensive debt on their balance sheets. So if they#x2019;ve got property, many are seeing an opportunity to extend that debt and turn it into a mortgage,#x201d; he said.

ADF also said that a fall in residential yields was prompting small investors to buy offices, while a more stable economic environment was encouraging business owners who had moved into their premises two or three years ago with an option to buy to exercise that option.

ADF estimated that taking out commercial mortgages works out at about 40 per cent cheaper than renting at the moment.

Suvo Sarkar, the general manager for retail banking and wealth management at Emirates NBD, said the lender is dealing with demand for mortgages for commercial offices and industrial warehouses as the number of businesses setting up in Dubai grows and rental costs increase.

#x201c;Businesses want predictable cash flows so a mortgage with a fixed rate makes a lot more sense,#x201d; said Mr Sarkar. #x201c;That#x2019;s why we#x2019;ve seen an increase in demand for commercial properties. I think specifically in the last 12 to 18 months we#x2019;ve seen an increase in demand for both office space and warehousing space.#x201d;

The bank is enhancing its range of commercial mortgage products, he said.

Interest rates for loans against commercial properties would be on a par with the overall mortgage market, rather than at the higher cost that SME borrowers typically bear.

The six-month Emirates Interbank Offered Rate (Eibor), a benchmark for lending in the UAE, is hovering close to record lows at 0.88 per cent.

Abu Dhabi Finance has also established a joint venture with the Khalifa Fund for Enterprise Development aimed at lending to small businesses in an attempt to help them reduce the heavy overheads of office rents.

The news comes at a time when the government is relying on SMEs to ramp up GDP growth amid a weaker oil price.

But although UAE banks repeatedly say that they are keen to lend to small businesses, SME owners frequently complain that individual requests for finance have been stonewalled.

ADF added that the number of applications for residential mortgages in Abu Dhabi grew 20 per cent in the first three months of 2015 compared with a year earlier. However, the company added that the number of mortgages it had signed off over that period had remained stable.

It said that it expected to grow its residential mortgage portfolio in 2015 to about Dh700m.

lbarnard@thenational.ae

United Community Banks Inc. (Blairsville GA) (UCBI) is Trading Lower on …

United Community Banks Inc. (Blairsville GA) (UCBI) experienced unusually high volume on Apr. 22, as the stock lost 0.11% to a closing price of $18.47. The stock saw 456,121 shares trade hands over the course of the day on 3,394 trades. Given that the stock’s average daily volume over the last month has been 188,965 shares a day, this represents a pretty substantial spike over the norm.

United Community Banks Inc. (Blairsville GA) has a P/B ratio of 1.51. It also has a P/E ratio of 16.7. The stock has traded between $19.53 and $14.86 over the last 52-weeks, its 50-day SMA is now $18.89, and its 200-day SMA $17.60.

United Community Banks Inc is a bank holding company. It offers a range of retail and corporate banking services, including checking, savings, and time deposit accounts, secured and unsecured loans, wire transfers, brokerage services.

Headquartered in Blairsville, GA, United Community Banks Inc. (Blairsville GA) has 1,506 employees and is currently under the leadership of CEO Jimmy C. Tallent.

For a complete fundamental analysis of United Community Banks Inc. (Blairsville GA), check out equities.com’s EVA. report for UCBI.

THE IMPORTANCE OF THE RUSSELL 3000

The Russell 3000 is not well known outside the world of finance, but it’s one of the strongest indices out there for getting a broad sense of the stock market. Unlike the better-known Dow Jones Industrial Average or SP 500, membership on the Russell 3000 isn’t selected by committee. It’s simply the 3,000 most valuable companies in the country.

With 3,000 stocks making up the index, it gives a broad look at the markets, including the small-and mid-cap companies that aren’t on the Dow or the SP 500. And with a rules-based system for determining membership, there’s no bias that could potentially limit membership. That’s why many financial professionals will turn to the Russell 3000 long before the better-known indices when trying to take the temperature of the market.

For more news on the financial markets, go to Equities.com. Also, learn more about our Small-Cap Stars. Register to become a member and leverage our proprietary research tools such as the Small-Cap Stars, and robust do-it-yourself Equities Valuation Analysis (EVA.) research reports.

All data provided by QuoteMedia and was accurate as of 4:30PM ET.

Borrower beware: Title, payday lenders are back

Dorman used his truck title loan as an example.

They also make you take out a $700 insurance policy with the money you borrow to cover them. It covers them and yet it does not cover you, Dorman said.

Instaloan offers title loans with reasonable interest rates but requires an insurance fee even if the vehicle car is already insured. When News4Jax tried talking to officials at Instaloan, the company referred us to Titlemax. We called and emailed Titlemax without a response.

While the state of Florida says there are no title lenders operating in Jacksonville, Instaloan is licensed as a consumer finance company that can hold car titles as collateral.

We also checked title loan businesses in Georgia, where companies are allowed to charge much higher rates. News4jax found numerous shops located in St. Marys and Kingsland, just across the Florida border. We went to several trying to talk with them about the loans and their business practices, but each one turned us away, referring us to their corporate offices. Its been two months since our first visit and we still havent heard a response.

Dorman said hes not surprised they have not responded. He has this advice to anyone considering taking out a title loan.

Do not do it. Do not borrow money on your vehicle, Dorman said. If you plan on keeping your vehicle, do not do a title loan on it.

Its not just title loans giving people problems. News4Jax heard from several people about payday loans — short-term, unsecured loans designed to be paid back with the next paycheck.

Josh Shaw has used payday loans for some time, and still finds he needs to go back about once a month to get more cash.

They help, but when you have to pay them back, you have to redo the cycle over and over. And once you pay it back you are paying more and more back, Shaw said.

Drysdale said thats the reason she has been trying to get lawmakers to look at these loans and offer some protection .

A lot of them are online, and if they are online they are difficult to pin down if there is a problem, Drysdale said.

Legal Aid tired to sue a payday leander that said it was based in Canada, but was linked to Ireland and was really based in Malta. Drysdale said it is hard to protect people from these types of loans when the lender cant be tracked down.

High-ticket lenders can no longer target military personnel

Years ago, title and payday lenders were clustered around Mayport and NAS Jacksonville.

I had four or five of them on Mayport Road, closed them down completely, said Bill Kennedy, of the Navy Marine Corps Relief Society.

New state regulations and the Military Lending Act passed in 2007 limited the amount of interest a company can charge members of the armed services.

The Navy Marine Corps Relief Society also helping active-duty military staff by offering them an alternative to payday and title loans. The group can get servicemen and women quick-assist loans that are interest free with no questions asked. 

We got thousands of sailors out there. We want to make sure they dont have to worry about our bills being paid are car payments being made. Is the insurance being made? Is there food on the table? Kennedy said. So we stand by to assist them to make sure, if anything happens, so they can worry about the operational commitments and their operational duties.

UNCUT INTERVIEW: Navy Marine Corps Relief Societys Bill Kennedy

Kennedy now sees a new threat from lenders not located outside the base, but from online loans, where no one is enforcing the rules. While these loans are currently legal, they still present problems.

They are all high-interest loans — in my opinion, predatory lenders, Kennedy said. They do it online and they instantly put money into service members checking accounts, and they set up a repayment plan.

Drysdale said men and women in the military are some of the most vulnerable to these services.

A typical creditor cant contact your employer, just to say, Mr. Smith is not paying his debt, you should speak to him about this. But if you are in the military, then failure to pay your debt can be an issue, so the lender can contact the superior officers. Also, if there are problems with no payment of debt, it can affect someones security clearance.

Kennedy says those lenders are not allowed to contact superiors, but some do.

They like the military, Kennedy said. They know get paid on the 15th. They know they get paid on the first.

We have checked with Pioneer and Omni Credit, two of the big leaders for active military. Omni accepted our questions but has not responded. Pioneer responded to say it is working on a statement. 

To learn more about regulations on these businesses or to verify a license, call the Office of Financial Regulation at 850-487-9687 or visit its website: flofr.com.

Click to see a spreadsheet of all businesses licensed to transmit money in Florida.

Another victim comes forward in alleged rent to own scam

Another victim is speaking up after allegedly falling for a rent-to-own scam that has already cost a local man tens of thousands of dollars.

A woman, who asks to remain anonymous, says she didnt want to hide what EPI Homes in Midland did to her family.

Its a simple concept. You would like to buy a house, but youre unable to get a traditional mortgage. So you rent it, with a portion of what youre paying going toward the purchase.

A local man and woman both say they were duped by people who didnt own the homes that they thought they were buying.

The woman says EPI agreed to help rebuild her credit and she would rent a home until her and her husbands credit scores were good enough to buy.

She says she gave EPI all of the money she had for the down payment of the home, $7,000.

After three years of on-time payments, the woman says she fell behind and immediately received an eviction notice. She has contacted a lawyer in hopes of getting her down payment back.

Dennis Brookover says after many failed attempts to buy a home, he says he stumbled upon the website of EPI Homes out of Midland.

The home Brookover chose sat on 20 acres in Breckenridge. Thats about 30 miles west of Saginaw.

He had bad credit but says he was told by the people at EPI that his credit would be rebuilt with timely payments and in about 2 years he would be able to complete the purchase of the home by obtaining a conventional mortgage.

Brookover says he shelled out $7,000 for the down payment. He then paid 12-hundred dollars a month for almost three years. On top of that, he says he spent thousands renovating the place.

Its been hell, says Brookover. You find out that youre buying a place that isnt even yours and you put all of this money into it.

All totaled, he says he spent 50-thousand dollars on a home he thought would eventually be his. So, hes suing EPI claiming he was lied to or misled.

Phil Ellison is Brookovers attorney. Hes handled many real estate deals and says he doesnt understand why EPI required such a large down payment.

Who pays $7,000 onto a piece of property that you are leasing and the answer is, you dont, says Ellison. You had to be thinking you were buying it.

It turns out EPI didnt even own the home in the first place.

According to court documents, EPI was only leasing the home with its own option to buy. Their deal called from them to pay $103,000 for the home. The documents show that they then made a deal to sell the home to brookover for $164,000.

Ellison says thats not the worst of it. In the end, no title, no ownership, no equity, says Ellison. They simply get evicted as if they were a renter even though they thought they were buying.

The civil case is headed for trial. Brookover says he hopes he will eventually get his money back.

EPI released a statement, saying Its always been the companys policy to treat our tenants and buyers with respect and integrity. We fell confidant the truth in this case will be revealed in court.

Why is renting versus owning important here? In Michigan, you can be evicted from a home much faster as a renter and EPI is firing back at Brookover by saying he signed the agreement and failed to look it over carefully.

They also say that they are filing a counter suit against Brookover because of the condition he left the home in. Well keep you posted.

gt;gt;gt;TV5 7-Day Forecastlt;lt;lt;

Copyright 2015 WNEM (Meredith Corporation). All rights reserved.

One Uber Driver’s Story: How He Was Trapped by Auto-Loan Program

Richard Brunelle says he feels trapped. He says he has to drive for Uber.

The San Leandro man needs to make money for car payments. His 48-month loan is costing him $1,000 a month and has a 22.75 percent interest rate. He says he got into this mess through a vehicle financing program Uber created for drivers with poor or nonexistent credit.

Since November 2013, Uber has been signing up drivers without cars or the credit to get one. The ride-service company connects drivers with car dealerships and a variety of lenders, some of which specialize in subprime auto loans. It promises to get them a car in less than a week.

The promotional video for the program says: “Everyone deserves to have a success story. Let Uber be part of yours.”

Uber says it created the financing program after hearing from potential drivers that they couldnt get cars. It has not released data on exactly how many drivers have used the program, but Uber says thousands have signed up.

Heres Ubers pitch for why banks should give loans to people with no credit: Its drivers are a safe bet regardless of their credit scores because they have a steady source of income the money they make driving. Economist William Black says thats faulty logic.

Black is a former bank regulator who researches and writes on subprime auto loans. He says its risky to give these loans to people with poor credit. In the case of Uber drivers, Black says, all kinds of things could go wrong and prevent them from making the high-interest car payments.

For instance, driver income could change overnight if Uber decides to cut its rates, which it has done repeatedly. Drivers could get sick or injured. If they dont have savings, which many people with poor credit do not, drivers wont be able to make the payments and the car could get repossessed.

The bottom line is, you need to underwrite these individuals.Economist William Black

The “bottom line is, you need to underwrite these individuals,” Black says. In other words, the drivers should have co-signers for the loans. And they dont.

Instead, Uber is working with lenders such as Santander Consumer USA, the American consumer finance unit of a Spanish banking group. The subsidiary has a history of regulatory problems. These lenders make subprime auto loans, charging high interest rates to people with no credit or bad credit.

Brunelle, 58, started driving for Uber last August. He thought it would be a nice retirement job after working in the Navy, in a prison, in construction and as a truck driver. But Brunelle didnt have a car he rode a motorcycle and he says he had no credit because hed always avoided credit cards. His wife told him about Ubers financing program and he decided to give it a try.

Uber connected Brunelle to a dealership and lender. Things did not go smoothly from there.

Brunelle says the dealer sold him a car that didnt qualify for the discount Uber promises as part of the financial package. He says the dealer also quoted him a different rate verbally than the rate on the paperwork he signed.

This loan is like a ball and chain.Driver Richard Brunelle

When Brunelle got home, he realized he had signed a loan with a 22.75 percent interest rate. That means he will end up paying  around $49,000 on a Kia Optima that normally retails for about $25,000.

“I tried to refinance this car last week and theres just too much overhead on the car right now that I cant get a re-fi on it, Brunelle says.

The dealer wont take the car back and Uber wont help him try to sort this out, says Brunelle. Now the loan is “like a ball and chain, he says.

He says the financing program is just a scheme to get more drivers on the road so that Uber can make more profits. He says, “I feel like Uber not only tossed us to these wolves, but they intentionally did it and they are making bank on it.”

Richard Brunelle says he has to work most of the week just to cover his 22.75 percent interest car loan and driving expenses. (Sam Harnett/KQED)

In a written statement, Uber says it is proud of the program, and that it helps people get cars who normally couldnt.

Uber adds “that the agreement is between the driver and the lender rates are determined by the lender and the purchaser must agree to the rates.”

In other words, drivers are on their own when it comes to finalizing the financial deal.

As far as Brunelles specific situation, Uber says: We provide drivers with a list of specific cars where an Uber discount applies, and the Kia Optima is not on the list. However, drivers are free to choose whatever car they’d like.

The company says drivers should be able to make the loan payments for these cars by working 10 hours a week. But Brunelle says that math doesnt work out.

After Uber cut drivers rates again last fall, Brunelle says hes working most of the week just to cover his loan payments and driving expenses. Hes working just to break even.

Now he is posting on forums, warning other drivers not to take the financing. Otherwise, he says, they could end up trapped like him.