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Borrower Nightmares: $700 dormitory fee costs family its car

Stories based on the survey Deception outstanding debt, which began in February, how lenders would exploit loopholes in existing laws to make predatory loans and confusing.

When the son of Mildred Morris won a coveted spot at the theater in New York performing arts college which has trained singer-songwriter Jason Mraz and television actor Jessie Tyler Ferguson of "Modern Family", it was delighted. The drama, however, extended beyond school.

Morris began the process of obtaining a loan to pay college tuition for his son, Jonathan, to attend the American Musical and Dramatic Academy, but was caught off guard by a sudden and unexpected charges $ 700 to hold a dorm room for him.

A single mother of two children in the city of Martinsburg, West Virginia, 90 minutes northwest of Washington, DC, Morris worked in the branch of technical support for the Coast Guard office that issues the merchant marine the equivalent of a driver's license.Although she had a steady job federal, Morris had no savings or credit cards, and with the difficult economic environment was impossible to meet the cost of $ 700 to friends.

She did, however, possess a sport green 2002 Pontiac Sunfire free and clear.

A friend told her about a place that has given money quickly if borrowers put their cars as collateral. Obtaining the loan took only 30 minutes, she said, most of the time to check references. Morris signed a contract with the fast auto loans, took his check for $ 700 and the company gave the title to his car, which could quickly resume Auto Loans if it has fallen behind in repayments.

It was only later that she realized how high the interest rate on his loan was - 300 percent annually.

"I should have taken the time to go over it," she acknowledged. "When I saw how it was great, and I thought, wow," she said. At first she tried to pay more than the monthly minimum, but with the cost of obtaining Jonathan moved and settled in New York, she began to fall behind in payments to car loans fast. Some months she could only pay $ 210 and $ 175 of that went to interest, just lower the loan principal.

Many months and more than $ 1,000 later, Morris called quits, according to a complaint she filed with the West Virginia attorney general. The office is now investigating fast automatic, on behalf of Morris and other consumers.