By Isabelle Hajek, The U.S. Sun
A LOVING husband was trapped in what some consider a predatory loan after being denied a standard mortgage.
The first stop when people need to borrow money is often a bank loan mortgage, but when low income combines with less-than-desirable credit, mortgages are no longer an option.
Robert Ball, 63, and his wife Gloria were not afforded the mortgage option and went to a title lender for their loan.
Living in a quaint and cozy Savannah, Georgia home, the pair were looking forward to spending time with their family, notably their grandchildren, after retiring.
Plans change fast when health and finances are involved, just as they did for the Balls in 2019.
Gloria began experiencing a range of major health problems that came coupled with surging hospital and medical bills.
Living off of just Robert’s pension, the bank refused the couple a mortgage, so Robert went to TitleMax.
TitleMax is just one of many title lenders, where a person can loan money against the title of their car; if they do not pay, they lose it.
ONE MONTH TURNS INTO TWO YEARS
To pay off some medical bills, Robert took out a $9,518 loan from the company in 2019, in exchange for a lien on his 2006 Honda Ridgeline truck.
“When I was coming up, there were not a lot of Black folks who owned their home. If you have that roof, that is a sacred thing,” he explained of his choice to go to a title lender.
“I was facing the loss of my wife. No way I could handle losing our home as well.”
According to his contract at the time, Robert had 30 days to pay back the loan plus any interest accrued.
When he questioned the store manager about the payment timeline, Robert was told that as long as he paid $1,046 every month, he could keep his car.
But this answer was not a comprehensive one, as Robert would go on to pay over double the amount of his pervious loan before realizing the sneaky truth.
In 30 different states, the practice of title lending is outlawed or gutted in its practices by legislation.
This is because title lenders are notorious for implementing egregiously high-interest rates that, in order to keep up with, borrowers are nearly unable to pay off the principal on their loan.
TitleMax’s interests range from 119% to 179% annually and despite being on a one-month payback plan, loans often stay active for years, found Pro Publica.
One year before Robert took out his loan, paid a $9 million fine, only about 1% of the company’s revenue that year, to the federal Consumer Financial Protection Bureau for misleading customers about the full costs of its loans in Georgia, Alabama and Tennessee.
Despite this slap on the wrist, Robert’s story aligns quite perfectly with the lack of transparency described in the company’s 2016 charges.
For two years, Robert was stuck paying the $1,046 monthly charge, only to find out that he was only putting money to the interest on the loan, rather than the actual borrowed amount.
If he had not caught the pattern, Robert could have been left paying the interest for the rest of his life.
By the time he realized what was happening, the dotting husband had paid $25,000 of interest without one cent going to pay off his original loan amount.
“It was a terrible feeling. I mean, I worked my whole life, for 38 years. I thought we were going to enjoy our retirement together. Instead, we were facing this kind of catastrophe. It’s a shameful situation for people like us — to be in debt,” Ball recalled his feeling upon finding out.
‘I WAS DESPERATE’
But at the time he did not feel like there was much of an option for him.
“I was desperate” for quick cash, Ball told Pro Publica.
“They welcome folk like me.”
Many label this “welcoming” as a predatory approach, claiming that the open arms with which title lenders, like TitleMax, greet low-income and vulnerable customers with is part of an exploitive business model.
“Privately there is not a legislator in Georgia who doesn’t feel like it is a scourge on our state, but publicly there aren’t many willing to take on” said Liz Coyle, the executive director of Georgia Watch, a consumer advocacy group against current title lending practices.
“Their clout is too great, and political will is too weak.”
Democratic State Senator Lester Jackson, a Black military veteran who represents Savannah, takes a different stance, claiming that Title Lenders may not be optimal but are commonly the only option.
“Banking deserts are real,” said Jackson.
“Sometimes, this is all that the community has.”
At age 71, Robert declared bankruptcy as a result of growing debt, trying to relive himself of the TitleMax contract, but they kept coming.
They aimed to repossess his truck, which Robert took them to court on and lost.
Lorena Saedi, a bankruptcy lawyer and managing partner of Saedi Law Group in Atlanta explained that Robert’s position is not unusual.
“There is no recourse. Title lenders operate a business that, while obviously immoral, is entirely legal in Georgia. It’s a terrible place to be powerless, poor or just down on your luck,” Saedi said.
Six months after he filed for bankruptcy, Gloria died.
Four years after the debt and court battle came to a woeful conclusion and he lost his wife, Robert says he has little left.
“I have no safety net. I only have Jesus,” Ball said.
TMX, TitleMax’s parent company, has yet to respond to a request for comment by the U.S. Sun.