5 ms·

They are a discount buyer, so it is generally a bad deal to use them and you basically shouldn't unless you have no other option. It is similar to getting a pa

They are a discount buyer, so it is generally a bad deal to use them and you basically shouldn't unless you have no other option. It is similar to getting a pay day loan, or selling stuff to pawn shop or keeping a balance on your VISA. You are going to get a bad deal. I don't really know what to do about it. How can you ensure people are educated enough to know that a discount buyer is a buyer who will under pay for your house? I guess you legislate away discount buyers completely? In Canada, they have regulated severely the amount of interest pay day loan companies can charge. This has led to a shrinkage in the number of pay day loan companies. So I guess some similar type of consumer protection laws could be enacted in this space.

nekitamo 3y ago
Legislating away discount buyers would be like legislating away payday lenders. The only thing accomplished would be to leave a hole in the market which will be filled by shady loan sharks.
- deleted 3y ago
  [deleted]
- refurb 3y ago
  Not sure why you’re downvoted because it’s true. People desperate enough to use payday lenders have no other options. And the high interest rates reflect the risk. Take that option away and the need doesn’t magically disappear, they just go to black market lenders where there really is no backstop at all. Far better to regulate.
  - Nursie 3y ago
    > People desperate enough to use payday lenders have no other options. Not always true, some folks misuse them for a variety of reasons. Take the option away in the UK and a friend’s boyfriend wouldn’t have been able to use an app to take out a bunch of short term loans in her name for Xbox games… So I think sometimes these facilities are used frivolously. You’re right that a portion of users in real hardship would turn to “informal” lending if these lenders were to disappear. But it feels like we as a society should come up with a better solution there really.
    - logicchains 3y ago
      >Take the option away in the UK and a friend’s boyfriend wouldn’t have been able to use an app to take out a bunch of short term loans in her name for Xbox games… There's already a solution there, she could take him to court to recover the money. Your argument is basically "ban X because X can be used in an illegal way".
      - Nursie 3y ago
        No, my argument is that not every use of x constitutes immediate, severe need, so the consequences of banning x would not necessarily be to drive all service users of x straight into the arms of loan sharks. Further to that, my argument is that for people who are in such severe need that they would then turn to loan sharks, there is probably a better solution out there that we as a society should be looking into, than usurious payday lenders. At no point was my argument anything close to “ban X because X can be used in an illegal way"
- devmor 3y ago
  This will be a fairly contentious opinion, but I believe if there exists a class of business that is recognizably harmful to that level, which we only keep around so as to prevent criminal alternatives, then such businesses should be replaced by government run services. In fact, I personally believe this scenario is likely the most essential use for government run services.
  - eyelidlessness 3y ago
    I don’t agree with your secondary point, but I agree so much with your primary point that my inner monologue was screaming “just say government, it’s okay, you’re correct and we all know this is where this is heading” as I was reading it.
- ClumsyPilot 3y ago
  "which will be filled by shady loan sharks" You are replacing friendly-looking loan sharks with door-to-door salesmen with clearly illegal loansharks. For the same reason you don't want cocaine sold near "fun toys for kids"
- Clubber 3y ago
  Each state has usury laws, but there are of course loopholes and exclusions. https://www.upcounsel.com/lectl-state-interest-rates-and-usury-limits https://www.upcounsel.com/lectl-state-interest-rates-and-usu... In 1980, due to high inflation, the federal government passed a special law that allowed national banks to ignore state usury limits and pegged the rate of interest at a certain number of points above the federal reserve discount rate. In addition, specially chartered organizations like small loan companies and installment plan sellers, such as car financing companies, have their own rules.
  - toast0 3y ago
    That doesn't seem unreasonable. Really, the usury laws should be linked to the federal discount rate anyway. If 20% is usury when the law was written and prevailing rates were 10-15%, 19% shouldn't be allowed when prevailing rates are 0-5%
    - Clubber 3y ago
      >That doesn't seem unreasonable. Sort of: The 1978 case Marquette National Bank v. First of Omaha Service Corp. unanimously held that nationally chartered banks may charge the highest rate allowed in the bank's home state. This is why so many banks are located in states like Delaware and South Dakota, which have very liberal or nonexistent usury laws. So even if you live in a state that has a very low usury limit, it typically has no bearing on the interest you pay on your credit card. https://caselaw.findlaw.com/court/us-supreme-court/439/299.html https://caselaw.findlaw.com/court/us-supreme-court/439/299.h...
- topkai22 3y ago
  1) Professional buyers are defined as any person not kin or well known to the seller that has bought another property within the last 3 years. 2) Professional buyers contracts must allow a 30 day cooling off period in which the seller may back away from the agreement without punishment. 3) The 30 day cooling off period is initiated by the buyer prominently posting the offer in the local MLS service or similar prominent and accessible system. The buyer is responsible for ensuring any alternative offers during this period are conveyed to the seller. 4) The buyer and seller may avoid the 30 day cooling period by having a certified appraiser conduct an appraisal of the property and executing the sale at no less than 6% below appraised value. I could throw in a couple other clauses in there to take care of people "brokering" regular sales to straw buyer or about requiring disclosures that recommend sellers consult with family and/or homeowner advocacy group within the 30 day cooling off period, but that is the crux of it. This wouldn't eliminate the industry, but it would limit the actions of the worst offenders. Offers dramatically below market value should get counters. The worst consequence seems like it would be that the seller will get absolutely swarmed by realtors trying to convince them how much more money they would get with them.
danielmarkbruce 3y ago
In the cases mentioned specifically, the buyer has broken a law already (at least two are fraud) or the contract is invalid (lack of mental capacity). This isn't really a story per se. People are doing illegal stuff or stuff that won't hold up in court if challenged. We have a system for it - it works ok, not fantastically. We don't need new regulation for cases like this, we just need better execution on the existing system. Better execution costs more money, and as a society we get to some balance of more taxes v more stuff slipping through.
- heavyset_go 3y ago
  Someone who is selling their house for pennies on the dollar most likely can't afford to police lenders and keep them honest via lawsuits, especially sellers like those in the OP who are mentally disabled.
  - ianai 3y ago
    This. It seems lost just how much enforcement relies on the smallest/weakest amongst us to fight back. That’s probably priced out of those same peoples possibilities. It shouldn’t be like this. It creates a lawless atmosphere tinged with legalese as needed to coherence the victim.
- stanleydrew 3y ago
  This is a reasonable take, but I think it's also reasonable to suggest that if current system execution is too expensive then perhaps a new regulation could make it cheaper. Of course there are perhaps unintended side effects from new regulation, but "this is already a crime, we don't need anything new" isn't prima facie a sufficient argument. If a lot of a similar type of crime is going unpunished, there may be a reason other than "enforcement agencies are lazy", and perhaps a new law can help.
  - deleted 3y ago
    [deleted]
  - 55555 3y ago
dclowd9901 3y ago
Cool. I’m sure the cross section of people who would be victims to discount real estate buyers and visitors of this site is basically one circle. I’m sorry but your comment is weirdly unconstructive.
- hackeraccount 3y ago
  How about this: What interest rate is too high? What price for your home is too low? They both depend upon your circumstances and your view of them. There is a set of circumstances rationally viewed where you can pay a very high interest rate or take a very low price for your home. If you're acting irrationally then you have problems - the question is should we try to help you with your problems or removing some of the ways you might act irrationally, keeping in mind that in doing so we're stopping some rational people from doing something they want that is by definition rational.
johnnymorgan 3y ago
Fyi it did Jack squat to payday loans, there are more and more stores opening all the time and they pivoted into term loans. Can't fix any of this until the fiat network is fixed. In Canada it's the big 5 banks that provide the liquidity to the payday loan network. It's entirely possible to get it down to $5 per $100..which is still a shit deal but way better than $23 per 100 but ain't gonna happen while the big 5 is making bank
iudqnolq 3y ago
In response to this article the company promised to stop suing customers to force them to follow through on sale contracts. That sounds like a constructive change.
- gota 3y ago
  That sounds like backing out for fear that regulation, resulting from popular pression, will mean that selling to folks with dementia will land you in jail.
- klyrs 3y ago
  If you think a promise sounds like change, I don't know what to tell you. These behaviors were already "against company policy"
gondaloof 3y ago
> a bad deal [...] similar to [...] keeping a balance on your VISA Huh? Elaborate?
- bhouston 3y ago
  Interest rates of the average VISA card are insane and most people can get a better loan product if they need the money. VISA makes tons of money for being convenient but insanely expensive. https://wallethub.com/edu/cc/average-credit-card-interest-rate/50841 https://wallethub.com/edu/cc/average-credit-card-interest-ra...

nekitamo 3y ago

Legislating away discount buyers would be like legislating away payday lenders. The only thing accomplished would be to leave a hole in the market which will be filled by shady loan sharks.

deleted 3y ago
[deleted]
refurb 3y ago
Not sure why you’re downvoted because it’s true. People desperate enough to use payday lenders have no other options. And the high interest rates reflect the risk. Take that option away and the need doesn’t magically disappear, they just go to black market lenders where there really is no backstop at all. Far better to regulate.
- Nursie 3y ago
  > People desperate enough to use payday lenders have no other options. Not always true, some folks misuse them for a variety of reasons. Take the option away in the UK and a friend’s boyfriend wouldn’t have been able to use an app to take out a bunch of short term loans in her name for Xbox games… So I think sometimes these facilities are used frivolously. You’re right that a portion of users in real hardship would turn to “informal” lending if these lenders were to disappear. But it feels like we as a society should come up with a better solution there really.
  - logicchains 3y ago
    >Take the option away in the UK and a friend’s boyfriend wouldn’t have been able to use an app to take out a bunch of short term loans in her name for Xbox games… There's already a solution there, she could take him to court to recover the money. Your argument is basically "ban X because X can be used in an illegal way".
    - Nursie 3y ago
      No, my argument is that not every use of x constitutes immediate, severe need, so the consequences of banning x would not necessarily be to drive all service users of x straight into the arms of loan sharks. Further to that, my argument is that for people who are in such severe need that they would then turn to loan sharks, there is probably a better solution out there that we as a society should be looking into, than usurious payday lenders. At no point was my argument anything close to “ban X because X can be used in an illegal way"
devmor 3y ago
This will be a fairly contentious opinion, but I believe if there exists a class of business that is recognizably harmful to that level, which we only keep around so as to prevent criminal alternatives, then such businesses should be replaced by government run services. In fact, I personally believe this scenario is likely the most essential use for government run services.
- eyelidlessness 3y ago
  I don’t agree with your secondary point, but I agree so much with your primary point that my inner monologue was screaming “just say government, it’s okay, you’re correct and we all know this is where this is heading” as I was reading it.
ClumsyPilot 3y ago
"which will be filled by shady loan sharks" You are replacing friendly-looking loan sharks with door-to-door salesmen with clearly illegal loansharks. For the same reason you don't want cocaine sold near "fun toys for kids"
Clubber 3y ago
Each state has usury laws, but there are of course loopholes and exclusions. https://www.upcounsel.com/lectl-state-interest-rates-and-usury-limits https://www.upcounsel.com/lectl-state-interest-rates-and-usu... In 1980, due to high inflation, the federal government passed a special law that allowed national banks to ignore state usury limits and pegged the rate of interest at a certain number of points above the federal reserve discount rate. In addition, specially chartered organizations like small loan companies and installment plan sellers, such as car financing companies, have their own rules.
- toast0 3y ago
  That doesn't seem unreasonable. Really, the usury laws should be linked to the federal discount rate anyway. If 20% is usury when the law was written and prevailing rates were 10-15%, 19% shouldn't be allowed when prevailing rates are 0-5%
  - Clubber 3y ago
    >That doesn't seem unreasonable. Sort of: The 1978 case Marquette National Bank v. First of Omaha Service Corp. unanimously held that nationally chartered banks may charge the highest rate allowed in the bank's home state. This is why so many banks are located in states like Delaware and South Dakota, which have very liberal or nonexistent usury laws. So even if you live in a state that has a very low usury limit, it typically has no bearing on the interest you pay on your credit card. https://caselaw.findlaw.com/court/us-supreme-court/439/299.html https://caselaw.findlaw.com/court/us-supreme-court/439/299.h...
topkai22 3y ago
1) Professional buyers are defined as any person not kin or well known to the seller that has bought another property within the last 3 years. 2) Professional buyers contracts must allow a 30 day cooling off period in which the seller may back away from the agreement without punishment. 3) The 30 day cooling off period is initiated by the buyer prominently posting the offer in the local MLS service or similar prominent and accessible system. The buyer is responsible for ensuring any alternative offers during this period are conveyed to the seller. 4) The buyer and seller may avoid the 30 day cooling period by having a certified appraiser conduct an appraisal of the property and executing the sale at no less than 6% below appraised value. I could throw in a couple other clauses in there to take care of people "brokering" regular sales to straw buyer or about requiring disclosures that recommend sellers consult with family and/or homeowner advocacy group within the 30 day cooling off period, but that is the crux of it. This wouldn't eliminate the industry, but it would limit the actions of the worst offenders. Offers dramatically below market value should get counters. The worst consequence seems like it would be that the seller will get absolutely swarmed by realtors trying to convince them how much more money they would get with them.

danielmarkbruce 3y ago

In the cases mentioned specifically, the buyer has broken a law already (at least two are fraud) or the contract is invalid (lack of mental capacity). This isn't really a story per se. People are doing illegal stuff or stuff that won't hold up in court if challenged. We have a system for it - it works ok, not fantastically. We don't need new regulation for cases like this, we just need better execution on the existing system. Better execution costs more money, and as a society we get to some balance of more taxes v more stuff slipping through.

heavyset_go 3y ago
Someone who is selling their house for pennies on the dollar most likely can't afford to police lenders and keep them honest via lawsuits, especially sellers like those in the OP who are mentally disabled.
- ianai 3y ago
  This. It seems lost just how much enforcement relies on the smallest/weakest amongst us to fight back. That’s probably priced out of those same peoples possibilities. It shouldn’t be like this. It creates a lawless atmosphere tinged with legalese as needed to coherence the victim.
stanleydrew 3y ago
This is a reasonable take, but I think it's also reasonable to suggest that if current system execution is too expensive then perhaps a new regulation could make it cheaper. Of course there are perhaps unintended side effects from new regulation, but "this is already a crime, we don't need anything new" isn't prima facie a sufficient argument. If a lot of a similar type of crime is going unpunished, there may be a reason other than "enforcement agencies are lazy", and perhaps a new law can help.
- deleted 3y ago
  [deleted]
- 55555 3y ago

dclowd9901 3y ago

Cool. I’m sure the cross section of people who would be victims to discount real estate buyers and visitors of this site is basically one circle. I’m sorry but your comment is weirdly unconstructive.

hackeraccount 3y ago
How about this: What interest rate is too high? What price for your home is too low? They both depend upon your circumstances and your view of them. There is a set of circumstances rationally viewed where you can pay a very high interest rate or take a very low price for your home. If you're acting irrationally then you have problems - the question is should we try to help you with your problems or removing some of the ways you might act irrationally, keeping in mind that in doing so we're stopping some rational people from doing something they want that is by definition rational.

johnnymorgan 3y ago

Fyi it did Jack squat to payday loans, there are more and more stores opening all the time and they pivoted into term loans. Can't fix any of this until the fiat network is fixed. In Canada it's the big 5 banks that provide the liquidity to the payday loan network. It's entirely possible to get it down to $5 per $100..which is still a shit deal but way better than $23 per 100 but ain't gonna happen while the big 5 is making bank

iudqnolq 3y ago

In response to this article the company promised to stop suing customers to force them to follow through on sale contracts. That sounds like a constructive change.

gota 3y ago
That sounds like backing out for fear that regulation, resulting from popular pression, will mean that selling to folks with dementia will land you in jail.
klyrs 3y ago
If you think a promise sounds like change, I don't know what to tell you. These behaviors were already "against company policy"

gondaloof 3y ago

> a bad deal [...] similar to [...] keeping a balance on your VISA Huh? Elaborate?

bhouston 3y ago
Interest rates of the average VISA card are insane and most people can get a better loan product if they need the money. VISA makes tons of money for being convenient but insanely expensive. https://wallethub.com/edu/cc/average-credit-card-interest-rate/50841 https://wallethub.com/edu/cc/average-credit-card-interest-ra...