Obama’s Home Warranty Scam

A story appeared in a local newspaper this month. It described one of the scams Home Warranty companies use to squeeze more hard earned dollars out of their unsuspecting customers. In this scam the customer is offered a new air conditioning unit under their warranty, but part of the deal is paying an exorbitant fee to dispose of the old compressor. The reason for this fee, they are told, is that because of the nasty hazardous Freon. What they are not told is that the Freon has to be drained as part of the dismantling procedure. They are also not told that recycling companies pay good money for old compressors. Check out this link for the story:

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My wife and I purchased a home warranty back when we bought our house. We no longer have one due to a similar hard lesson. The house wasn’t new and some fixing up was definitely on the menu. The hot water heater broke down and, thinking we were getting a real deal, we exercised our warranty and got a new one. It lasted about a year and a half. It flooded the garage when it failed. On top of that, the company that installed this unit charged us a hefty fee to dispose of the old one. We found out later that folks make money off of recycling those things as well. Now we have a very good water heater we bought though one of the home improvement stores. This one was installed by a very competent, experienced plumber who explained why the water heater failed so quickly. It was a bottom-of-the-barrel model that costs less than the fee I was charged for disposal. If I continued to exercise the warranty, I would be doing a rapid backwards march into fiscal ruin.

Mortgage industry scam

There is a similar scam being run by the mortgage industry right now. Interest rates are as low as they have been in decades. Some companies are paying less than 1% for the money they loan. In my case I wanted to refinance my home which, fortunately, isn’t in an upside down mortgage. I figured I could save something on my monthly outgo. I didn’t figure on the rapaciousness of the mortgage industry. The best deal I was offered was a buy down on the massive amount of points and other fees they wanted to charge which would have left me with a payment just a little higher than what I’m paying now. Based on the figures from the Fed, there is more than enough room for nearly every bad mortgage to be turned around without points, fees and other forms of thievery. Nearly every day you see stories in the paper about the foreclosure rate. The Obama Administration offers up messages of concern, but little else. Why? What deal does he have with the mortgage industry? If you want to receive help with your mortgage problem you have to stop making payments, ruin your credit rating and be threatened with foreclosure before the lenders will deal with you. Apparently the government will not extend credit toward institutions or citizens that exercise good fiscal judgment. Frankly folks, honest citizens are getting scammed royalty, and for no good reason.

Healthcare bill is another scam

The healthcare bill is another scam. It’s just like the disposal of old compressors. The truth isn’t being told to us by the salesman. Cap and Trade? Think Home Warranty government style. And the list goes on. If you own a home, rent, own a car, or generally have become a member of the consuming class, you most likely have run into one of these scams or others like them. If you have, let me know. It may be useful to pass that info around.