Finding The Perfect Arizona Home

There is a lot of excitement involved when purchasing your first home. It’s a time of high emotion when things can seem to take forever or happen really quickly in the same day. It is this time when some snap decisions have to be made that can dramatically affect the purchase process. Everyone would love to have surplus time in which to consider their home purchase but sometimes that is not the case. Careful planning in the early stages is a good way to ensure smooth sailing once you start the process of making serious offers. Things can move quickly in the Arizona real estate market, you had better be prepared!

The best things you can do when purchasing an Arizona home is your homework. Spend some time learning about the process that a home purchase takes; learn about the different stages that it moves through so that you can be prepared for any situation that arises. Your realtor is a invaluable resource during this process as they are skilled at navigating the twists and pitfalls involved with the purchase of a home. Another good idea is to have your finances completely dealt with and verified before considering buying. Have your mortgage approved and ready to go on all counts before making an offer. If you wait until offers are made to secure financing, you could easily lose the home to another buyer with approved financing or end up in a bad situation where you find out that the financing that is available to you is not enough to cover your offer. This can be a terribly bad situation for all involved so avoid it at all costs.

Now, in searching for your perfect home, take a second to consider what the future will hold for you. If you are single, is marriage in the plans? Children? Is this going to be a home you live in for many years? Try to plan ahead for the home and realize whether or not an upgrade will be necessary or if this is going to be home base from the foreseeable future. Its much better to accommodate any future plans before purchase when there are still options available.

Understanding Seller Financing Benefits and Risks

Seller financing happens when the owner of a property agrees to finance the buyer. As anything it has its pros and cons. This article will discuss some of the benefits and risks/drawbacks for sellers and buyers.

Benefits for sellers

– Seller may be able to sell property faster. The pool of buyers increase significantly when the seller offers seller financing. Many buyers do not qualify for traditional financing and decide to seek seller financing opportunities.

– Seller can usually demand a higher price for his property. Seller financing is a value added benefit to the transaction. Buyers that do not qualify for traditional financing will typically be more flexible and will accept to pay more.

– Seller can defer taxes on the appreciation of the property. As you probably know, sellers pay taxes on the amount the property appreciated since he bought it. When they sell the property outright, they end up having to pay taxes that year. When they finance the transaction, they do not pay taxes on the appreciation until the new owner refinances the mortgage.

– Seller can typically receive a nice return on the money he has invested in the property. Sellers that offer seller financing will typically charge a higher interest rate than the prevailing rates charged by traditional lenders.

– Quicker escrow. Once buyer and seller agree on the terms, the transaction can move forward and close within a few days. Transactions using traditional mortgages still require a few weeks before they can close.

Benefits for buyers

– Opportunity to buy a property even if he does not qualify for a traditional mortgage.

– Lower closing costs. Traditional lenders charge a number of fees when they issue a mortgage. As a general rule, buyers are responsible for paying those fees. In seller financing transactions, sellers will typically charge fewer fees if any.

– Everything is negotiable. Buyer and seller can negotiate down payment, closing costs, interest rate, term, etc. Sometimes a buyer can obtain a lower down payment by agreeing to a higher interest rate, or vice-versa.

– Quicker escrow. As mentioned above, once buyer and seller reach an agreement, we can close within a few days.

Risks and drawbacks for sellers

– Seller does not receive his money until buyer refinance the mortgage few years later.

– Seller is now acting as a bank, with similar responsibilities. He has to collect payment, send past due notice, pay property taxes or confirm that buyer paid them directly, pay homeowner’s insurance or confirm that buyer paid it, etc. To minimize work, seller can hire a company to service the loan.

– If buyer defaults, seller has to initiate foreclosure proceedings in order to take the property back. Foreclosure is a complex process that needs to be executed correctly.

Risks and drawbacks for buyers

– Buyer will need to refinance the mortgage within a specific amount of time. Most sellers will carry the note for 2 to 5 years. Few sellers may go longer than that. However it is very uncommon for sellers to agree to carry the note for 30 years like a traditional mortgage. Buyer will need to pay for the refinance.

– There is a risk that the property may not appraise when buyer tries to refinance. To protect the buyer, the note should have a provision to deal with this situation.

– There is a risk that the buyer may not qualify for a traditional mortgage by the note’s deadline. To protect the buyer, the note should have a provision to deal with this situation. One way to address this risk is to have a provision that allows buyer extra time to qualify.

– Buyers eager to buy a new property, may end up overpaying. In a traditional mortgage, banks will order an appraisal that will provide another layer of protection for the buyer. A typical seller financed transaction will not have an appraisal done. Buyer should be extra cautious.

Seller financing is a wonderful instrument that can benefit both buyers and sellers. However, it is too easy to focus only on the benefits and forget about the risks and drawbacks. Buyers and sellers should invest the time to understand the process and seek advice of a knowledgeable professional.

Banking and Finance Attorney

The Arizona banking and finance attorney career center will help you with state and federal laws pertaining to the regulation of banks and financial institutions, including establishment of the institutions, day-to-day operations, and banking, both electronic and international.

However, before you approach the Arizona banking and finance attorney career center, you must understand the jobs of banking attorneys, how to select a good lawyer, and many other things. Banking attorneys deal with the state and federal statutory laws pertaining to the regulation of banks and financial institutions. Even if you are not facing litigation or a regulatory enforcement proceeding, retaining a banking and finance attorney to assure compliance with all state and federal banking laws, rules and regulations governing the operations of your institution will certainly help you avoid legal hassles later.

If you have a banking or finance problem and you do not already have a list of prospective lawyers, one of the greatest places to start your prudent search is the Arizona banking and finance attorney career center. You can do a free search to come up with a list of lawyers. Moreover, once you have a list of lawyers, you want to find out every thing you can about them and then do some initial screening to whittle down your list to three or four prospective candidates. You need to locate the best resource to get extensive yet authentic information on the various factors associated with the Arizona banking and finance attorney career center. This would help you to select the right Arizona banking and finance attorney career center.

Arizona Real Estate Power Hour – Overview of Section 2 of the Arizona Purchase Contract – Part 1-2

In this article we are going to discuss the second section (FINANCING) of the Arizona Residential Resale Real Estate Purchase Contract. The FINANCING section is used only if the buyer is planning on getting a loan to pay for part of the purchase price. For all cash transactions, the FINANCING section is skipped.

Please note that this article applies only to the Real Estate Purchase Contract in use in Arizona. For information on Real Estate Purchase Contracts in use in other states please check with the Association of REALTORS in each state.

The FINANCING section has 11 subsections. We will cover the first 6 subsections in this article and the remaining 5 in part 2.

2a. Loan contingency – this is probably one of the most important clauses in the whole Purchase Contract. It states that the buyers will not be obligated to complete the sale if they can’t obtain the loan to buy the property. One important point is that the buyers will have to provide a Loan Status Report (also known as LSR) when they submit an offer to purchase the property. The LSR describes in detail the type and terms of the loan the buyer is pre-approved for. The buyer is required to seek the specific loan with the lender that signed the LSR. If the buyers change the loan product or the lender and can’t obtain the loan, they will not be able to use the loan contingency to cancel the contract.

2b. Unfulfilled loan contingency – states that the contract can be canceled and the buyers will be entitled to receive a refund of the earnest money if they can’t obtain the loan. It is important to note that the buyers will have to demonstrate that they did all they could to obtain the loan. Failure to have the down payment and other funds to close the transaction; or failure to provide required documentation to the lender is not an unfulfilled loan contingency; and as a result can’t be used to justify contract cancellation and refund of earnest money.

2c. Appraisal contingency – another important clause to protect the buyers. If the property does not appraise for at least the sales price, buyers are not obligated to complete the transaction. Buyers will be entitled to cancel the contract and receive a refund of the earnest money. Buyers have five days after notice of the appraised value to cancel the contract. If they fail to cancel the contract within that timeframe, the appraisal contingency will be waived.

2d. Loan Status Report – LSR is a document issued by the lender which shows that the lender has pre-approved the buyer for the loan product and amounts described in the LSR. This subsection includes language to incorporate the LSR into the Purchase Contract.

2e. Loan application – states that buyers are required to complete their loan application within five days of Purchase Contract acceptance. Buyers are required to (1) complete, sign and deliver to the lender a loan application with requested disclosures and documentation; (2) grant lender permission access buyer’s credit reports; and (3) pay all loan application fees.

2f. Loan processing during escrow – requires that buyers work diligently during escrow period to provide lender with additional information and documentation necessary to obtain the loan. This subsection also authorizes lender to provide loan status updates to all real estate brokers involved in the transaction and to the sellers.

Arizona Land for Sale has good long-term Growth Potential

Land for sale in Arizona has become a popular investment, following the surge in home values in many areas of the state.

Investors who saw the growth potential – and invested a few years ago, have made some huge profits. However, as new inexperienced buyers enter the fray, have the big gains come to end – or are there more to come?

Let’s find out what the profit potential is for from land for sale in Arizona:

Land for sale is dominated by key players – who often hold large swathes that smaller investors want to buy – and they’re not selling it cheaply anymore – prices asked, and received tend to be quite high.

Not only are prices up – they’re expensive now – and the upside isn’t going to be what it was over the last 5 years.

Arizona land for sale tends to be more speculative than buying developed properties. That makes good Arizona land lots harder to value – and makes financing more difficult, if buyers want to pursue this option.

Some lenders – including most of Arizona’s largest banks, simply don’t give land loans to non-commercial buyers – except those who’ve selected land lots with sewer lines, road access, and other infrastructure in place.

“Ideal borrowers hold for 12 to 18 months while designing their dream homes,” said Mike Downing, a senior vice president at Chase Home Finance in Phoenix. “As for raw land, where people are looking for the next big opportunity to flip, we don’t participate in that.”

Hard lender terms encourage seller financing – and of course, cash deals. This can put raw-land purchases out of the reach of middle-class buyers – especially since land doesn’t generate any Income – it relies on development to bank a profit.

Buyers of Arizona land in lots, or parcels of 5 to 10-acre can pay up to $200,000, 10 years ago, you could buy for around $45,000.”

The phoenix market continues to attract investors – but how good an investment is the land? In addition, will prices really hit the highs that people expect – with the economy likely to slow in the foreseeable future? Can investors really make 50% – maybe, but there are problems ahead.

Raw land, not directly in the path of development is a blank canvas – whose use and value can be hard to predict.

Phoenix still has room to grow – to the southeast, and west – but with a good supply of land in this area, land may be difficult to sell quickly – and at a profit.

The history of land for sale in Arizona points to holding longer term. Land can generate excellent returns longer term – and in Arizona, this should continue. Anyone looking to become wealthy quickly from Arizona land may find it hard to do from now on.

Arizona Land Prices are fuelling another Market

As Arizona land prices look as if they’ll tail off, this is driving investors to look at other markets. One market that appeals to many Americans is Costa Rica. With Costa Rica being just a three-hour flight away, and with land prices up to 70% cheaper than in Arizona – Costa Rican land prices are booming – and prices will continue to boom.

In Costa Rica, many investors are making 100% profits in just a year! This is one market that doesn’t look like slowing down in terms of growth. Investments are hitting record levels – as Americans flock to this country for the good life.

The baby boomer generation is realizing they must take steps to preserve their lifestyle – and that’s why the trend in Costa Rica will continue – and land prices will continue to soar.

Costa Rica is stable, has good ties with the US, buying land is easy – and you get the same rights as the Costa Rican citizens themselves. Throw in tax advantages, and Costa Rica land for sale offers cheaper lots – and more growth potential, than Arizona land for sale.

If you’ve been considering buying Arizona land, but you’re not prepared to hold the land long term, but fancy some quick double digit profits – head south – to Costa Rica!

Choosing an Arizona Lender

When you decide to move to Arizona, the first thing you want to begin doing is looking for a home and an Arizona lender to finance your new home. Some people choose to do this before they move in order to have everything in place when their move is final, but others want to wait until they arrive so that they can physically see the property they are buying. The problem with waiting is that you delegate yourself to an apartment or hotel until you find a home and an Arizona lender to finance it, thus you incur expenses for storage of your furniture and other belongings that won’t fit into your temporary residence.

Even if you are going to wait until you arrive to find a home, you can still choose an Arizona lender to finance the purchase. Many mortgage companies today offer pre-approvals on their websites or over the telephone, so if you do nothing else, you can obtain approval for your mortgage and look for the home when you arrive at your chosen destination. Keep in mind that the pre-approved mortgage has an expiration date, so if you are not planning to eave for six months or more, you may want to wait before you apply for a pre-approved mortgage, or it may not be valid when you arrive. Depending on the Arizona lender you choose, thee may be other criteria you must meet once you arrive, so make sure that you don’t take on any additional credit and that you don’t miss payments on any of your loans or payments in case they decide to run another credit check when you actually submit your application.

Before you can choose an Arizona lender, you may want to make certain that you know the area where you want to live, especially if you want a local lender. If that isn’t important, you still want to make sure that the Arizona lender you choose is willing to finance property in the area of your choice. Sometimes lenders have a policy concerning areas they are interested in financing, especially local lenders. They may want property that is within a certain parameter of their office in order to maintain closer contact with the homeowner, so you want to be sure if there are any distance requirements before you apply. It doesn’t always happen that there are regulations on areas, but it does happen sometimes with small lenders who may not have the ability to travel outside of their regional area.

Arizona Real Estate Power Hour

In part 1 we covered the first 6 subsections of the FINANCE section of the Arizona Purchase Contract. In this article we will address the remaining 5 subsections.

Please note that this article applies only to the Real Estate Purchase Contract in use in Arizona. For information on Real Estate Purchase Contracts in use in other states please check with the Association of REALTORS in each state.

2g. Type of financing – this is the subsection where the buyers indicate what type of financing they are planning to use. The type of financing here should be the same one identified in the Loan Status Report (LSR) discussed in part 3. Common types of financing are:

– Conventional – a conventional mortgage is any loan that is not guaranteed or insured by the federal government.

– FHA – these are loans insured by the Federal Housing Administration (FHA) and made by approved lenders following FHA specific guidelines.

– VA – these are loans guaranteed by the Veterans Administration (VA) made to a qualified veteran (according to VA criteria) and made by an authorized lender on an approved property.

– Assumption – these are loans that allow buyers to take the sellers place in the loan. Instead of obtaining a new loan, the buyers will be assuming the existing loan the sellers have.

– Seller Carryback – these are loans where the sellers agree to finance the whole or part of the purchase.

2h. Loan costs – defines who (buyers or sellers) will pay for the different loan costs and fees, including Private Mortgage Insurance (PMI); discount points; A.L.T.A. Lender Title Insurance Policy; Loan Origination Fee; and Appraisal Fee.

2i. Other loan costs – defines the maximum amount the sellers agree to pay in addition to the amounts already defined in subsection 2h above. This will limit the sellers’ financial exposure to the amount included here. Also, for VA loans, sellers agree to pay the escrow fee. And lastly it states that all other costs to obtain the loan shall be paid by the buyers.

2j. Changes – buyers are required to get written consent from sellers prior to making changes in the loan program, financing terms, or lender described in the LSR. However buyers are not required to obtain prior consent from sellers if the changes do not (1) adversely affect buyers’ ability to obtain loan approval; (2) increase sellers’ closing costs; and (3) delay close of escrow.

2k. FHA Notice – this subsection applies only to buyers using an FHA loan. It states that the Department of Urban Development (HUD) does not warrant the condition of the property. It also requires FHA buyers to attach a signed copy of the form HUD-92564-CN, “For Your Protection: Get a Home Inspection”.

5 Ways to Research Rural Arizona Land For Sale

Worthwhile investments naturally require careful analysis. Thus purchasing high country raw undeveloped Colorado, New Mexico, or Arizona land for sale is no exception. We believe that undeveloped land investment is one of the better ways to increase your financial holdings, but doing your research and due diligence remains vital to your success.

Here are a few questions to ask yourself about, for instance, Arizona land for sale.

1. What is the reason for this raw undeveloped land investment in the Arizona land for sale High Country?

This will determine the kind of Arizona land for sale you seek, its location, and price. For instance, you may plan invest in the Rim Country near Payson. You plan might be building a residential second home to escape the heat of the Valley of the Sun. Alternatively, you may want to buy Arizona land for sale in the high country only to hold the investment for a time as values continue to rise due to the many Californians moving in and paying California prices.

2. How can I get the information?

First, visit and become familiar with Arizona land for sale in the area, from Payson through Heber-Overgaard and Show Low-Pinetop to St Johns, Eagar and Alpine. While the fierce development may now be in the areas most readily reached from Phoenix and California, the entire region is likely to see major increases in land value in the next decade. Check the present and possible future zoning for the land to determine if your development idea will work with city and county plans, or to know what kind of value it might have should you want to sell to a future developer. Study the history, political and cultural make up of Gila, Navajo and Apache counties to understand just how they may react to the changes brought about by so many new residents.

3. How should you work with real estate professionals?

Do not choose just any agent. Raw and undeveloped Arizona land for sale investing is a real estate specialty, and you want to work with someone who is such a specialist and knows the likely future development of the area. I suggest that you work with several, compare their opinions and counsel. Even then, you may decide to buy directly from the owner rather than through an agency.

In the White Mountains, you will find a number of owners individually selling off their family property. These are often better deals than those offered through an agency. These are sometimes offered with owner financing.

You can talk to farmers and ranchers with Arizona land for sale. Be on the look out for tax sales and foreclosures, read the newspaper subdivision notices, research the Navajo and Apache county government websites, and generally immerse yourself in what is going on.

4. How do you choose a sub area?

Examine the rate of growth in Payson or Show Low versus outlying areas. The speed with which an area is developing will increase the speed of your appreciation, but you want to find the areas where prices of Arizona land for sale have not yet taken off.

A Guide For Canadians

The real estate industry is governed by local, state, and Federal laws and therefore varies not only from state to state, but also country to country with each having its slight differences. The following is meant as a quick reference guide for Canadians (currently buying in Arizona more than in other group) considering the Arizona market.

The number of Canadians investing in Arizona real estate continues to trend upward. And, it is extremely important for these investors to understand the key elements of finding the right property. Even though the housing market in Arizona for Canadians is particularly favorable, the property buying process is important to understand as it may differ slightly from the process north of the border. It is now more important than ever, especially since the market is so saturated with property, to know how to buy to get into a profitable investment property as oppose to a money pit.

The 4 key elements of finding the right property in Arizona are:

1. Method of Acquiring the Property

2. Property Use

3. Location

4. Finding the Right Real Estate Company

These four key elements are not new concepts and have been practiced for as long as people have been buying property. The challenging part is being able to combine the knowledge of the market with understanding of which method should be used acquire the property. This article will provide a clearer picture into the how, what, and where of finding the right property in Arizona for Canadians taking a step forward and investing outside their home country.

The first key element is to determine which method will be used to acquire the property. Financing or cash? With the recent tightening of the US credit markets, the ability for Canadians to obtain financing to purchase US real estate has limited the number of banks offering the specific program needed. According to the National Association of Realtors (NAR) 2010 Profile of International Home Buying Activity Report, 34% of potential international purchasers were unable to complete a transaction due to financing problems. Typically, the more conventional options require large down payments and are limited to certain transaction types. There are some non-conventional options that allow for more lenient guidelines; however, the trade off is higher interest rates.

Although it is more challenging to obtain financing in Arizona for Canadians looking to purchase, there are options available. Another method used more commonly among Canadian buyers is cash. According to that same report by the National Association of Realtors (NAR), 55% of international purchasers paid cash. The majority of Canadian buyers use cash because it provides flexibility and since it is difficult to obtain financing. There are advantages and disadvantages to each method; however, it is important to pick the one that best fits the investment objective.

Once the decision has been made on how to acquire the property, the second element of finding the right property is to determine the best use for the property. There are really only two main options; second home or investment. According to the previously mentioned report by the NAR, 22% of all international buyers purchase their property as a vacation home for family and friends compared with 14% that use it as an investment. The numbers in Arizona specifically, trend a little higher toward the investment side… Closer to 20%. The use of the property will determine what type of property to acquire. Would you be looking to use their property as a vacation home or an investment home that is all about cash flow.

Its very important for Canadians to remember… How the property is going to be used sets the stage for what a Canadian’s strategy is when it comes to buying because the few programs available for Canadian borrowers may stipulate that the purchase is a second home and not an investment. Largely, Canadians who are buying with cash are drawing money from either their Canadian home equity or Canadian line of credit.

Once the use of the property is decided, the third element is determining the best location. The reason that the use of the property is so important when looking at location is that some areas of Arizona cater more towards vacation homes and recreation whereas other areas are more advantageous for investment properties and may not be where a family would want to spend its days. The popular vacation destinations are in resort-like areas, typically close to one of the many Arizona golf courses. These obviously tend to sell for more, since the areas are more desirable. A few examples of these locations are North Scottsdale or Fountain Hills. If one is looking for investment properties, then prime locations are lower priced homes with a high rent demand. These are typically located closer to the city. Examples are Tempe (near Arizona State University) or North Phoenix. A good real estate broker or agent can provide you with zip code maps which demonstrate rents or sales for a particular area based on zip code alone. A zip code is the same a postal code north of the border. And, Canadians looking to purchase should really develop a good working relationship with an agent on the ground in Arizona prior to buying or even visiting so that time and money is not wasted for either party.

The final element is finding the right real estate company. You will want one with experience working with Canadian buyers. Again, the market in Arizona is different. Look at what could happen if the right company is not chosen. Mis-representation, lack of market knowledge leading to buying a property in the wrong location, paying too much for a property, not identifying what property type that best meets the buyers needs from a mortgage or tax basis… the list goes on and on. But the biggest danger for Canadians is the belief that the real estate market in Arizona is similar to what they are accustomed to north of the border. It isn’t.

So, how is someone unfamiliar with the Arizona market supposed to find the right real estate company? There are several ways to locate real estate companies operating in Arizona. One good way is to speak to your local real estate agent in Canada. They may work with a larger agency that has branch offices throughout North America or have other buyers who have purchased property in Arizona. This is a great way to get feedback on the buyer’s personal experiences with these companies. Also, make sure that any company you work with has a good rating with the Better Business Bureau and Arizona Association of Realtors (AAR). Do the homework. It is much easier to do a little work upfront rather than deal with a potential issue later.

In closing, finding the right property in Arizona for Canadians looking to take advantage of this incredible real estate market may be right for you. Obviously, when it comes to real estate transactions there is no guarantee of a completely smooth event even after following the guidelines set forth in the previous paragraphs. However, following the advice of this article may allow Canadian buyers to minimize the potential issues that could arise and be prepared to deal with them so that they do not disrupt the end result… finding the right property in Arizona

Payday Loan Initiatives For Arizona and Ohio

With a presidential election that ended in a never-before seen way, it is almost impossible to focus on the underlying issues. However, the outcome of these issues represent state by state decisions that will ultimately affect thousands of Americans. Payday loan initiatives appear quite frequently on election ballots due to their strong controversial nature. Although debates and proposals have been given and displayed time and time again to help people understand the importance of the payday loan industry in America, it remains a negative part of our society.

What is the controversy? Simply put, payday loans are illegal in 15 states nationwide and it seems that many more states are following suit. While the majority of people say it is just another money hungry industry looking to trick consumers into paying unnecessary amounts of money, some people have come to understand the purpose of the lending business. Regrettably, the opposing side is composed of people who do not need and have never used the system and more unfortunately still, they are the vast majority of people who actually vote on these issues. Because most payday loan institutions are centered in low-income areas of the country, many view them as illegitimate businesses. The truth is they are there because they are needed. Most low-income consumers depend on payday loans to pay off their pending bills or simply to make ends meet on a day-to-day basis.

Arizona has become the most recent state to take charge against the payday loan industry. With annual percentage rates on loans reaching over 400%, many felt the need to step in. The truth is, the rate makes it profitable to the lender and affordable to the consumer. Problems arose only when the loans were used inappropriately. Many consumers misunderstood or did not follow the necessary steps to make an efficient and problem-free transaction. People who were opposed to the industry made the argument that their late-fees were unreasonable, when they are really the same as any other sort of loan, either from a bank or a credit union.

Since payday loans in Arizona face extermination in 2010, supporters of the industry took an opportunity to fight against this in the 2008 presidential election. Proposition 200, as it was called, offered a reasonable alternative. It included a substantial APR cut from $17.50 to $15 for every $100 borrowed. There would be repayment plans available and would eliminate roll-over charges if payments were not made on time. Lastly, it would only allow consumers to take out one loan at a time. While the plea was reasonable, the bill did not pass. 40.50% voted for it while 59.50% defeated it. Arizona’s payday loan industry faces extermination in 2010.

Over the past few years, Ohio has seen a rise in the payday loan industry, with institutions appearing in every corner of the state capital. Earlier this year however, it became the most recent state to pass a law regarding payday loans. The law (or Issue 5) put a 28% cap on percentage rates which, up to that point, had reached about 391%. The law also limited the amount of loans to four per year and capped payday loan institutions in relativity to Cleveland’s population. Although the initiative was said to be made with the intention to regulate the percentile rates, it has only made it impossible for the payday loan industry to exist. With a 28% limit, there is no room for profit and because of that payday loans have slowly diminished from the state of Ohio and over 6,000 people have been left without a job.

Ohioans for Financial Freedom, a payday loan representative group centered in Cleveland, Ohio, made it a priority to change the law. They spent over 16 million dollars and acquired 279,174 signatures to re-install Issue 5 on the 2008 presidential ballot. Their goal was to get enough voters against the proposition and therefore re-instate the 391% APR and unlimited access to payday loans every year. Alas, it did not pass. 64.55% of voters approved the issue, while only 35.45% defeated it. Without a doubt, the payday loan industry will not be around for much longer in the state of Ohio.

There is a general misunderstanding about the payday loan industry. Truthfully, the majority of state legislators prefer the regulation rather than the elimination of payday loans. Their argument is that if a profitable yet reasonable agreement can be made between the industry and the rest of the country, it can be a valuable part of our society.