Nu Lu is No Go
"The proposed assignment is on its face unconscionable. The aggregate amount of the annuity payments he seeks to transfer is $ 95,611.10. The discounted present value of the annuity payments to be transferred is $ 73,284.15. Of this discounted amount, Lu would receive only $ 36,915.13, after paying Transferee's attorney fees and processing fees, totaling $ 2200.
If this same transaction were to be arranged as a loan, rather than the proposed assignment, Lu would be paying Transferee an effective annual interest rate of 21.68%. Transferee argues "[a] rate of 19.99% is fair and reasonable when one considers the nature of this industry." Transferee's argument is not persuasive, it is an indictment."
JUDGE: Randy S. Bingner, Administrative Law Judge, South Dakota Department of Labor, Division of Labor and Management
ACTION: NU LU, Claimant/Payee, v. SETTLEMENT FUNDING, LLC dba PEACHTREE SETTLEMENT FUNDING, Transferee, and FARMERS NEW WORLD LIFE INSURANCE COMPANY, and MID-CENTURY INSURANCE COMPANY, Annuity
Decision Date: October 26, 2006 Cite: 2006 SD Wrk. Comp. LEXIS 18
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Contrast what the judge stated in his decision with the messaging from Peachtree to the public
"The needs of our customers. They will always come before our own, and the profit will follow"
Deborah Benaim, Vice-President and Managing Director of Structured Settlements, Peachtree Settlmeent Funding, in a February 13, 2007 press release.
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FACT: Peachtree Settlement Funding states that it purchases "high quality"deferrred payment obligations
Source: Peachtree Web Site on the date of original posting
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QUESTION
If Peachtree is only purchasing high quality deferred payment oblgations then WHY is Peachtree charging such a high effective discount rate?
Food for Thought Think about it… according to Bankrate.com on February 19, 2007, you can get a $50,000 30 year home equity loan at 8.06%, a 30 year fixed mortgage loan at 5.77% and a jumbo 30 year fixed mortgage loan at 6.02%. The rates on mortgages are set based in part on the buyer's credit and the cost of money to the lender. The buyer seeking a home loan is generally an individual and more risky from a credit standpoint. In the sale of a deferred payment stream the risk of default to the buyer of the payment stream is that the annuity issuer or assignee defaults. These are HUGE publicly traded, annually audited financial institutions with billions of dollars in assets! And we're not talking Enron type risk here either, we're talking companies that write stable value products like life insurance and annuities.
QUOTE from Richard B. Risk Jr. "A nationally well-known trial lawyer should be quoted. As Patrick said to me, maybe we shouldn't necessarily get one that would be speaking for ATLA, since SSP might be looking to open a dialogue with defense entities that believe in plaintiff's rights, i.e., some major insurer or investment company that wants to get into factoring, (emphasis added) now that it is legitimate. My suggestion would be Joe Jamail, who was recently (about a year ago) made a poster boy for NSSTA with his endorsement of structured settlements" Founding member of. Society of Settlement Planners March 3, 2003 (previosuly obtained openly on the Internet, although as a result of my prior post** the link is no longer displayed)
FACT: Deborah Benaim applied to The Society of Settlement Planners as a "Provider Member" in the Spring of 2005. After some prodding by Deborah Benaim's lawyer, John L. McManus , listed as a shareholder, specializing in Litigation, at the Ft. Lauderdale, Florda office of Greenberg Traurig, AND a review, the SSP Board accepted her application AND money from Peachtree Settlement Funding in or about September 2005. Deborah Benaim, quoted above, was until recently listed as a "Patron" of the Society of Settlement Planners on its website.
**SSP Quicktopic Has Long After Taste May 14, 2006
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