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December 11, 2008

TASC Releases3rd-Party Debt-Settlement Customer Survey Results

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The Association of Settlement Companies (TASC), a non-profit organization that promotes fair business practices, consumer protection and high industry standards for the debt-settlement industry, served as a featured presenter at the Federal Trade Commission’s workshop examining the debt-settlement industry on Sept. 25, 2008, in Washington D.C.

At the workshop, Wesley Young, the panelist representing TASC, discussed consumer protection challenges for debt settlement. Alongside four fellow panelists, Young fielded questions and engaged in discussions led by an FTC moderator. The panel also analyzed a mock advertisement to discuss ethical advertising to consumers by debt-settlement companies.

“The FTC workshop facilitated collaboration between the debt-settlement industry, creditors, legislators, and consumer protection groups,” said Young, TASC executive board member and legislative director, and general counsel for Debt Settlement America. “TASC plans to continue to work alongside these groups to help consumers distinguish reputable debt-settlement companies from the bad apples in the industry. TASC supports debt settlement as a positive, viable bankruptcy alternative for indebted consumers to consider as a debt-relief option.”

During his opening statement at the FTC workshop, Young shared results of a survey commissioned by TASC member company Nationwide Support Services, headquartered in Irvine, Calif. The survey, conducted by a third-party company, was targeted at approximately 1,500 customers who had completed debt settlement programs administered by Nationwide Support Services. Approximately 10 % of those consumers responded.

The survey concluded the following feedback from past debt settlement customers:

– 91 % would recommend debt settlement as a debt-relief solution

– 80 % described their overall experience with debt settlement as “excellent” or “good”

– 75 % were not interested in purchasing a guaranteed credit card in the future

– 51 % saved between $10,000 and $40,000 on the original amount of debt they owed

– 47 % were able to complete the program and pay off their debts within 13 to 24 months

“TASC found these results very encouraging and helpful to share as an example of the benefits of debt settlement to consumers and the impact of implementing TASC’s best practices in operating a debt-settlement company,” Young said. Nationwide Support Services expects to continue to survey customers for the next two years, also studying the effects on participants’ credit scores, spending habits and personal-finance behaviors after completion of a debt-settlement program.

Today, TASC’s 171 members include debt-settlement companies, industry vendors and law firms. TASC protects the rights of consumers through member certification programs and consumer education on debt settlement to provide consumers confidence in partnering with its members. TASC expects the FTC to develop a summary of its findings from the workshop within the next few months.

About TASC Member Nationwide Support Services

Nationwide Support Services (NWSS) is one of the oldest and largest debt settlement processing companies. It provides debt negotiation and customer support to independent sales offices throughout the United States. Additional information can be found at www.nationwidesupportservices.com.

About The Association of Settlement Companies (TASC)

The Association of Settlement Companies (TASC) promotes fair business practices, consumer protection and industry standards for the debt settlement industry. TASC, founded in 2005, serves to protect consumers through an organization seal that represents best practices and standards of reputable companies. The organization also protects its member companies through lobbying efforts at the state and national levels, as well as awareness initiatives to educate consumers on debt settlement as a financial solution. All TASC member companies pledge compliance to strict association bylaws governing business practices and ethics. For more information, visit http://www.tascsite.org. SOURCE: The Association of Settlement Companies

December 10, 2008

Debt Settlement, Loan Relief and the Foreclosure Crisis

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Consumer debt continues to climb each year. Clearly, Americans have a problem spending more money than they have. Debt to income ratios have been increasing significantly with consumers as incomes are declining while outstanding balances increase at a rapid pace.

Over the last ten years, homeowners have been able to take out home equity loans and consolidate their credit card debts into a lower more responsible fixed rate payment that they could afford. Back then home values rose annually, so borrowers could refinance their spending problems every few years. When the subprime mortgage debacle turned into a credit crunch, mortgage lenders quickly tightened their loan guidelines. Almost simultaneously, home values began to decline and homeowners were no longer able to refinance and consolidate their debt. People began losing their houses because they were defaulting on their mortgages.

Unfortunately a foreclosure crisis arose and banks began to fail because with increased foreclosures came a serious liquidity problem that significantly limited banks to lend to each other. Even when the Federal Reserve cut interest rate many times, the credit crunch got worse.

Now Americans find themselves with high rate credit card debt and mortgages that are larger than their homes are actually worth. Homeowners aren’t able to refinance for lower payments, debt consolidation or cash out. With home equity loans disappearing, debt settlement has increased dramatically because it’s legal and gives consumers a true alternative to bankruptcy. Debt settlement provides debt relief because the debt negotiation companies are able to reduce your balances and pay-off your revolving debt that carries the compounding interest.

Watch The Office’s Michael Scott declare bankruptcy!

Another mortgage refinancing alternative that has risen in popularity with homeowners has been loan modifications. Mortgage loan modifications are the result of banks restructuring loans for borrowers so they can avoid a foreclosure. The liquidity of banks has eroded in the foreclosure epidemic and now delinquent homeowners seem to have more leverage, because mortgage lenders don’t want your home anymore.

Bryan Dornan is a home financing expert who has published many financial articles online. Mr. Dornan operates several companies like Lead Planet, Loan Modification Outlet and Nationwide Marketing. Dornan recommends doing your homework before making financial decisions like taking out new loans, filing for bankruptcy or seeking debt counseling. He suggests visiting the following debt relief websites: debt settlement, Mortgage Loan Relief and Loan Modification.

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