It doesn't make any sense that an industry that may be having higher than normal chargebacks would cause a bank to start cutting off companies that haven't had one.
Martin may be paranoid when it comes to the banks, but it doesn't mean he's not right. Think of it, why wouldn't the banks want the paid-up-front loan mod companies out of business? Those are the guys who have already gotten their money, and if they don't get a good result they'll have to return it. Isn't that a more motivated company than one that has not been paid, and has to keep looking at their time commitments to see when it's time to pull the plug on a file?
It's common knowledge that the banks' first offer in a loan mod is where negotiations begin, not where they end. If, however, you are a loan mod company that has not been paid yet, you will be limited in how many times you can refuse offers. Banks will stretch those companies out, just like they would if you were suing them and you couldn't really afford the lawyer fees.
The naivete of people with regard to the banks is really shocking to me. What have they done in the past two years to deserve such benefit of the doubt? Lobbied for changes in bankruptcy laws (just for individuals, not for corporations), raised credit card rates on long-time customers with perfect records, stopped lending altogether, even when the government gave them the money to do it with? What does it take?
Folks...the reason a bank cancels a merchant account is predominantly due to consumer charge-backs. If a customer pays $1000 or $2000 or more on a credit card, then for WHATEVER reason doesn't want to pay for the service, they can request a refund. In many cases, loan mod companies that have already performed a great deal of work, or are frauds, still will refute the refund. BAM! Customer files a complain with the credit card company and its a chargeback. More than 1 or 2% for any company triggers a review, and usually an increase in discount rate or cancellation. Its the way the merchant processing system works. If the industry has a high degree of charge-backs, most major merchant processors won't handle it. Its a business decision by and large, probably not a consipiracy against loan mod companies by Wells Fargo...they have much, much bigger problems.
Okay 1b1141...
Perhaps I wasn't clear enough in my article... I am only talking about the cancellation of merchant accounts WITHOUT cause... no chargebacks... no complaints. None. Zippo. Nil. And still... cancelled without notice or cause. According to Wells Fargo in Arizona... if you're in the loan modification field then you won't be getting a merchant account with them in Arizona. I have two calls into Wells in San Fran, and I'm sure they're getting their story straight.
Since hearing from Mr. Wexler, I have heard from dozens of loan modification firms across the country and they've confirmed the situation. In a few cases, even checking accounts have been pulled.
I've found a perfect solution, however, and if any loan modification company reading this has a problem related to their merchant account THEY SHOULD REACH ME IMMEDIATELY. I've got the answer you're hoping for, and I've even arranged for loan modification firms to get priority treatment when they call through me. I've got the goods... even a cell number if it's after hours.
Do yourself a favor... don't wait until they freeze yours. It's time for a preemptive strike. Be ready and have an alternative up your sleeve.
As to your last comments LB141... what in the world could Wells Fargo have to worry about? They certainly aren't at risk of going under, that's for sure. The only moral of the story is... I have no idea, actually.
It doesn't make any sense that an industry that may be having higher than normal chargebacks would cause a bank to start cutting off companies that haven't had one.
Martin may be paranoid when it comes to the banks, but it doesn't mean he's not right. Think of it, why wouldn't the banks want the paid-up-front loan mod companies out of business? Those are the guys who have already gotten their money, and if they don't get a good result they'll have to return it. Isn't that a more motivated company than one that has not been paid, and has to keep looking at their time commitments to see when it's time to pull the plug on a file?
It's common knowledge that the banks' first offer in a loan mod is where negotiations begin, not where they end. If, however, you are a loan mod company that has not been paid yet, you will be limited in how many times you can refuse offers. Banks will stretch those companies out, just like they would if you were suing them and you couldn't really afford the lawyer fees.
The naivete of people with regard to the banks is really shocking to me. What have they done in the past two years to deserve such benefit of the doubt? Lobbied for changes in bankruptcy laws (just for individuals, not for corporations), raised credit card rates on long-time customers with perfect records, stopped lending altogether, even when the government gave them the money to do it with? What does it take?
It takes pitchforks and torches! Remember AIG Bonuses... That's what we need. That's what it will take. Nothing else.
View next topic View previous topic
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
