Thursday, September 24, 2009

“Police say Citra man created fake loans (The Ocala Star-Banner)” plus 2 more

“Police say Citra man created fake loans (The Ocala Star-Banner)” plus 2 more

Police say Citra man created fake loans (The Ocala Star-Banner)

Posted: 24 Sep 2009 03:41 AM PDT

According to officials, Michael Aubrey Groves, 32, of Citra, went to the Ocala Police Department and surrendered to Detective Steve Thibodeau shortly before 11:45 a.m.

The detective charged Groves with criminal use of personal identification information, offenses against intellectual property to defraud, and grand theft more than $20,000 but less than $100,000.

Groves was transported to the Marion County Jail, where his bond was set at $17,500.

Groves had been fired in March from his job at Campus USA Credit Union.

According to police, officials at the bank believe the scheme ran from June 2007 through February 2009, while Groves served as manager for the 2444 E. Silver Springs Blvd. branch.

During their investigation, an audit revealed that Groves made two unauthorized advances on valid loans on the account of a customer who lives in Newberry. The funds available totaled $4,150; Groves reportedly used $2,140.50.

Groves, officials said, entered false information into the computer, displaying loans totaling $116,337.20 in available money; he reportedly used $50,037.35.

Further digging by credit union officials indicated three of the loans were booked under the customer's personal account and the remaining two were placed under the customer's business name. Officials say Groves used the proceeds stolen from the customer's account to make payments on the fake loans created by him.

Credit union officials also discovered that on six separate occasions, Groves fraudulently used the customer's personal identification information to generate loans. And, credit union officials say, they were 17 transactions where funds were taken from the unauthorized loans Groves generated.

Aside from reimbursing the customer $2,140.50, the financial institution also had to write off the $50,037.35 in fake loans.

In March, senior credit union officials talked with Groves and he told them he created multiple fraudulent loans and converted the proceeds for his personal use. It was then that he was fired and law enforcement began their investigation.

Gabriel Hamlett, an attorney for Campus USA Credit Union, based in Gainesville, said, "We do take these matters seriously and we are cooperating with authorities to prosecute this matter to the fullest extent of the law."

Groves refused an interview request from the Star-Banner.

Contact Austin L. Miller at 867-4118 or austin.miller@starbanner.com



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Student loans can be a sinkhole (The Gainesville Sun)

Posted: 24 Sep 2009 03:41 AM PDT

Now throw into the mix the rising number of defaults on student loans.

The percentage of those loans in default grew to 6.7, up from 5.2 percent in 2006.

The figures represent borrowers whose first loan repayments came due between Oct. 1, 2006, and Sept. 30, 2007, and who defaulted before Sept. 30, 2008, according to the U.S. Department of Education.

In other words, the department reported, nearly a quarter-million student loan borrowers went into default during that one-year period.

This latest statistic didn't get a lot of notice in most major newspapers when it was recently announced.

But this disturbing trend is worth more than a paragraph or two.

While the administration continues to try to find ways to fix the financial industry and health care, there has to be more focus on curtailing what has become for too many the crushing cost of getting a higher education.

Without that education, many people won't be able to get well-paying jobs.

And without better jobs, they risk eventually becoming part of this nation's underemployed or unemployed.

Student loan defaults have been relatively low since hitting their peak of 22.4 percent in 1990.

Then, nearly one in four borrowers defaulted, according to the Department of Education.

The rate dropped to a record low of 4.5 percent in 2003.

So at 6.7 percent, things aren't as bad as they once were, yet they're still not as good as they should be. But the default rate tells just part of the story.

With wages depressed along with the high cost of housing and health care, even those who can keep up with their monthly student loan payments are stretching their education loans out for decades.

How bad is it?

Go to StudentLoanJustice.org and read the stories of "victims" living under crushing student loans.

Also go to www.defaultmovie.com and watch the poignant trailer from "Default: The Student Loan Documentary."

The feature-length film chronicles the stories of borrowers who, years after leaving school, are trying to repay loan balances that have ballooned to two or three times the amount they borrowed.

For so many, the heavy borrowing is unsustainable, and there are a number of efforts under way to call attention to the student loan sinkhole.

The RainbowPush Coalition, headed by the Rev. Jesse Jackson, has launched a "Reduce the Rate" campaign (www.reducetherate.org) urging the Obama administration to allow people to borrow at extremely low rates.

"Students should get the same deal banks are getting," Jackson said in an interview with me.

"If banks can borrow at 1 percent, then so should students."

Until there is a sustainable solution, there has to be a sea change in the view by many parents and students that college at any cost - no matter how unaffordable - is worth the years of financial burden and perhaps ruin.

In a study of 1,400 undergraduate students and parents, "How America Pays for College," lender Sallie Mae and Gallup found that 42 percent of families did not limit their search based on cost - even after reviewing financial aid packages.

Also, 70 percent of students and parents said a student's expected post-graduation income either was not considered or did not make a difference on their borrowing decisions.

Mark Kantrowitz, publisher of FinAid.org and FastWeb.com, has put out these words of caution: "If you borrow more than twice your expected starting salary, you will be at high risk of default."

Secretary of Education Arne Duncan said in releasing the default rates that the department is "reaching out to make sure current and prospective student borrowers are aware of the many flexible repayment options designed to assist them with their financial obligations, such as the new income-based repayment plan."

That program, which took effect in July, will give some borrowers a break.

Under it, you may qualify for relief if your federal student loan debt is high relative to your income and family size.

You may even be able to have the balance of your loans canceled.

Or, more specifically, the loans can be canceled after you've paid on the debt for 25 years.

Unfortunately, this option isn't available for private loans. You also are not eligible if your loan is in default.

While the income-based plan is helpful, it's just more of the same.

It essentially gives borrowers the opportunity to stretch out their payments, adding more interest costs.

I talked recently to a 52-year-old man who was still struggling to pay $50,000 in student loan debt.

Is this what we really want, people dragging their college debt up to or into their retirement years?

Write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or singletarym@washpost.com. Listen to Singletary discuss personal finance every Tuesday on NPR's ''Day to Day.'' To hear her reports online go to www.npr.org.



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Personal Finance: Financial Advice from a Legend (Washington Post)

Posted: 24 Sep 2009 07:34 AM PDT

Bogle is the author of "Enough: True Measures of Money, Business and Life," September's Color of Money Book Club pick.

In the book, he reminds us that there are ramifications for an economy that is too driven by the financial industry. What happens under those circumstances? Well, people get in debt up to their eyeballs.

Chat starts at Noon ET. Don't miss out on Bogle's advice. Submit a question now and tune in to the discussion.

Student Loan Sinkhole

Sunday's column on the student loan crisis elicited quite a bit of feedback.

Any time I broach this topic, there is a heated debate.

There's the side that thinks those weighed down with huge student loans should just stop complaining and pay their debts. Others - usually those weighed down with loans - argue they borrowed out of necessity only to find the debt too overwhelming.

Susan Beacham of Lake Bluff, Ill. wrote: "Community college is affordable for all. As a high school senior, you can continue to live at home and work during the day and attend classes at night. Ideal - maybe not - affordable - yes, I think so."

"Debt is a choice," says Beacham, "and these kids have made that choice and some without any regard for the consequences of that choice."

Beacham created Money Savvy Generation, a company committed to teaching kids about money. Their products have been featured as part of the Color of Money Book Club.

Kathy Kleine of San Juan Capistrano, Calif., says "I laughed when I read your column especially calling those who chose student loans, signed for student loans, and then can't or won't pay them back 'victims.' My husband had three loans and I had two loans and it was hard I will admit, but we never thought about defaulting because it was our responsibility to pay back what we borrowed. Yes, we were poor, ate Mac and cheese, went to year old movies if we could afford it, and never went out to dinner but we paid back our loans."

For the record, I did not nor have I ever called people strangling with student loan debt "victims." That's the term used on StudentLoanJustice.org.

Nonetheless, here is a testimony from one mother about her son's student loan sinkhole.

"My son got his business degree in the field of his passion, music," says Judith Mathison of Ventura, Calif. "Since the economy tanked, he's been existing on part-time work, unemployment and occasional real estate leasing listings. He's explained this to Sallie Mae but they're determined to get $750 a month from him (interest only) or up to $1,000. I'm hoping that the government offers some help to people like my son (and me, 58, still paying on my loans) who are being crushed by the economy."

Here's the Color of Money Question of the Week: Is it worth going into decades of debt to attend college? Please send comments to colorofmoney@washpost.com with your full name, city and state. Put "Student Loan Sinkhole" in the subject line.

Celebrity Cash

Did you see the fight this weekend?

Floyd Mayweather Jr. pummeled Juan Manuel Marquez. But Mayweather couldn't fight off the IRS.

Uncle Sam was threatening to take the money from Mayweather's $10 million fight purse. Nevada Athletic Commission Executive Director Keith Kizer said he received a levy notice ordering a deduction of $6.17 million to pay for Mayweather's unpaid taxes from 2007.

According to news reports, Mayweather has had tax trouble before. The IRS filed liens totaling nearly $6.3 million for unpaid taxes from 2001, 2003, 2005 and 2006.

One would think with so much money and often so many advisers that celebrities wouldn't get into tax trouble. And yet we continue to see stories like this: Mayweather Agrees to Pay $5.6M Back Taxes to IRS.

Low Prices in Aisle One

Let's get ready to rumble!

The recession has hit hard and now supermarkets are fighting for penny-pinching customers.

Grocery stores used to boast about their upscale décor and amenities such as fancy olive bars and imported cheeses. Wal-Mart even opened a test store in Texas that sold wine for more than $500. Now, it's all about low prices.

Read Post reporter Ylan Q. Mui's story, A Silver Lining in Grocery Aisles (Sept. 17).

Same Old Money, New Mindset

Here's another good thing about the economic downturn. More people are eager to manage their money better. The personal savings rate rose to more than four percent in July.

"There's a quiet revolution taking place in the way people save, borrow and spend that represents a retreat from old habits, and the first steps toward new ones" writes AP reporters Candice Choi and Eileeen AJ Connelly. For more on how you can save read Meltdown Gives Consumers A New Money Mindset (Sept. 22).

Charity Brown contributed to this e-letter.

You are welcome to e-mail comments and questions to singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.



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