African American Money: CEO Lawrence Watkins with George Kilpatrick

Lawrence Watkins and George Kilpatrick Break down the secrets to success.  Click the image to listen!

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Minority Homeowners Lost $213B during SubPrime Lending Crisis

The social advocacy group United for a Fair Economy just released a study stating that the cost of the mortgage crisis has been $213 Billion to minority groups.  The cost was calculated over the 8 years of the Bush Administration.

"Millions of African Americans lost their homes as a result of predatory lending and complicated contracts," says Dr. Boyce Watkins, Finance Professor at Syracuse University.  "This was a double whammy for senior citizens, including my own grandfather."

The report was entitled "Foreclsure: State of the Dream".  In fact, the study concludes that the impact of the crisis on the Black community was "the most massive loss of wealth for African Americans in U.S. history."

 

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Black Financial Scholar Boyce Watkins Tips on Consumer Confidence

Black Money: Fed Cracks down on Predatory Lenders

WASHINGTON - To prevent a repeat of the current mortgage mess, U.S. Federal Reserve Chairman Ben Bernanke said Tuesday that the central bank will issue new rules next week aimed at protecting future homebuyers from dubious lending practices.

The new rules will crack down on a range of shady lending practices that has burned many of the nation’s riskiest “subprime” borrowers — those with spotty credit or low incomes — who were hardest hit by the housing and credit debacles.

The housing, credit and financial crises have bruised the economy. Growth has slowed and employers have cut jobs every month so far this year.

In prepared remarks to a mortgage-lending forum in Arlington, Va., Bernanke said that “it is unrealistic to hope” that financial crises can be entirely eliminated, while maintaining an innovative financial system. “Nonetheless, recent experience has illustrated once again that financial instability can have serious economic costs,” he said.

Meanwhile, the Federal Reserve is also considering giving squeezed Wall Street firms more time to draw emergency loans directly from the central bank to help them overcome credit problems, Bernanke said.

In an extraordinary action, the Fed in March agreed to let investment houses go to the Fed — on a temporary basis — for a quick, overnight source of cash. Those loan privileges, which are supposed to last through mid-September, are similar to those permanently afforded to commercial banks for years.

“We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end should the current unusual and exigent circumstances continue to prevail in dealer funding markets,” Bernanke said.

Dealing with Bill Collector Harrassment

By Dr. Boyce Watkins - Syracuse University


Bill Collectors really want their money, like the rest of us. Some of them seem to feel that it is O.K. to resort to flat out thuggish intimidation to get their money back. That might work on The Sopranos, but it shouldn't work in real life.

Part of the reason abusive bill collectors can have their way with the public is because many citizens do not know their rights. Bill collectors prey on the uninformed in a terrible way: they threaten to have them arrested, they harass their relatives, call all hours of the night, the list goes on and on.

One woman successfully sued a rogue bill collector after he called her repeatedly with threatening language. The woman, a senior citizen, was told by the man to "Stop with the sob stories and pay your god damn bill!"

The Federal Trace Commission states that complaints against bill collectors are rising, reaching the highest level they've seen in the past 3 years. Most of the complaints focus on vulgar language, trying to collect more than the amount of the true debt, and extra fees, such as court costs.

There are rights that can protect you from bad and malicious bill collectors. You want to keep these in mind as you work yourself out of debt:

1) There is something called "The Fair Debt Collection Practices Act". If you are not familiar with this document, get familiar with it. You can read it by clicking here.


2) A bill collector cannot contact you at work if your employer does not approve of the contact. Let the bill collector know that this is the case and they must legally stop contacting you at your job.

3) Bill collectors cannot call you before 8 am or after 9 pm. The only exception is if you give them permission to do so.

4) A bill collector can only contact your friends and family if they are trying to find a way to get in touch with you. However, some of them may do this in order to harass or embarrass you. If that is the case, you may want to tell your friends to tell the bill collector, "She does not live here and I do not know how to get in touch with her. Please don't call here anymore." Then, get the bill collector's information from your friend and reach out to them when you can.

5) You can get them to stop contacting you altogether by sending them a letter telling them to stop. You still must pay the debt, but they won't be calling you during dinner.

6) The bill collector can not curse at you or use foul language and they must tell the truth about how much you owe. They cannot threaten to sue unless they are serious about it, and they can't touch your 401k or IRA.

7) If they call you, you can demand that they send you a written notice of the amount you owe and who you owe the money to. If you do not believe that the debt is yours, you can write a letter to them stating that this is not your debt. They must then send you proof that the debt is actually yours.

If you feel that a debt collector has violated any of these rules, you can contact the Federal Trade Commission at www.ftc.gov. Remember that you are not powerless in this situation.

Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of "Financial Lovemaking 101", the definitive guide to love, money and relationships. For more information, please visit www.financiallovemaking.net.

Finding Ways to Save Money

Saving Money can be tough, but it's not impossible. So, I figured that, in order to help us get our January started off right, I would give you some quick tips to save cash. The motto for today is "You have to have your mind right to keep your money tight", so think of this as every bit of a psychological exercise as much as it is a financial one:

1) Keep a budget - if you don't know where your money went, it's hard to know where it's going. Plan your spending and make sure that you are aware of just how much is coming in, going out and expected to be made in the future. This can help you plan cut backs or extra spending.

2) Take your lunch - did you know that by spending $7 per day for lunch, 5 days per week, you are spending $1,820 per year? If someone were to take that money and invest it in a portfolio earning 8% per year for 30 years, they would have $206,175.44. Now go snack on THAT.

3) Cut 10% out of your spending right now. Find that bill that you don't need or whatever else, and force yourself to make it happen. Pretend that your boss just gave you a 10% paycut and you have to take things out of your budget. Come on, you can do it!

4) Slice up a credit card or two - credit cards are America's financial poison and we are all addicted on some level. Get off the credit card crack pipe and start making healthy financial decisions.

5) Use a grocery list - don't shop without a list, so that your spending can be focused. Overspending at the grocery store gets me in trouble, which is why I have been getting fat. But not anymore, I am going to keep that list in my pocket. So, you see? We all have our vices, but it is up to each of us to work through our personal demons.

Dr Boyce on NPR - Black Family finances

As a finance professor, I see regular misconceptions in media about black people, black families and black wealth. America somehow has chosen to believe that the reason for wealth disparities in America is that African-Americans have simply chosen to be lazy and engage in the practice of bad money management. They also cite the fact that black families are not married as regularly and that this is a reason for poverty in the black community.

I could not disagree more.

The reason for the wealth disparity between blacks and whites is very simple: For 400 years (a very long time), America had a clear tradition of not allowing black people to pass wealth onto their children. As a result, all the big buildings in Manhattan, all the major media companies, and all the large corporations in America are owned, run and controlled by the white community. Period. Most wealth is inherited wealth and we were not allowed to inherit.

Black people choosing not to get married is no worse nor better than the fact that many families in America choose to get divorced. Honestly, I think divorce is far more devastating to the life of a child than not getting married. If one throws in the fact that non-custodial parents are obligated to pay child support, then the income gap, in a perfect world, should disappear. One can argue that two parents are better than one, but at the same time, 3 parents would be better than 2, and 4 parents would be better than 3. You could make this argument forever, and to use the one vs. two parent disparity as the fundamental basis to explain America's commitment to racial inequality is ridiculous.

Bottom line: Love is what matters, and if you look at the lives of Al Gore's son and kids in the suburbs who engage in just as much deviant behavior as kids in "the hood", you will see that a parent's decision to get married or not can be good for the child or bad, depending on the circumstances.

In other words: I get sick of people trying to say that black families are immoral or culturally inferior. Our culture is just fine thank you. Also, racial inequality and wealth gaps are due to one thing: historical discrimination. If you want to talk about creating a fair america, then you must first correct the huge imbalance created by racist ancestry. Trying to be fair from this point on (as Ward Connerly tries to argue) is like a lifelong crook stealing billions and then promising not to steal anymore. A fix must be applied to past wrongs before you can move forward in fairness.

I did this NPR interview on the topic not too long ago. It was done with Farai Chideya, a woman I had a huge crush on during my time in graduate school. Don't tell her I said that (haha!).