After an economy-focused State of the Union address and talks for a possible fair-trade deal between the United States and European Union, things are looking pretty bright on the financial forecast, right? Potentially, but the economy is just as hard to predict as the weather so nobody can know for sure. What I can tell you is that there were a few financial storms that made the week a bit bleaker. From the unfortunate, the strange, and the straight up dumb, here’s this week in financial blunders.
I’m sorry officer; I didn’t realize I was a squatter
A Palm Springs, Florida couple discovered in the worst way that their landlord was not a landlord at all. At least not for the house they were “renting.” 30 year old Nathalie Heil saw her neighbor’s foreclosed/vacant house as a financial opportunity, albeit a completely fraudulent one. Heil rented her former neighbor’s house out to a couple for $1500 a month, raking in a total of $13,000 from them (squatters math), and no one seemed to put two and two together until the former tenant’s daughter noticed that there were people living in her mother’s old abode.
Heil was quickly charged with grand theft and fraud, although Huffington Post reports she tried to file for “adverse possession,” one of those laws someone forgot to cut from years past that states squatters own a property if they live in it for seven years and pay taxes. Surprisingly, there was nothing to back this claim. Heil was arrested and released on a $6,000 bond.
Hey man, can I get my Quarterback?
Vince Young hasn’t been having the best time in the last year. He has had a prolific football career in which he was a Heisman runner-up, the 2006 NFL rookie of the year, played in the Pro Bowl twice and was on the cover of Madden 2008. However, every illustrious sports career must come to an end at some point, and Young was released from the Buffalo Bills this past August. It’s a bad time for Young to be cut too, because he’s in some bad financial straits.
Young took out a loan near $1.9 million during the 2011 NFL lockout to cover expenses for what could have been a long time of unemployment. Keep in mind though, when Young was signed in 2006, he had a five-year, $58 million contract that guaranteed $25.74 million of that, but it was 2011 at this point so naturally the $25+ million was already spent and gone. Regardless of spending habits, the real problem came with the loan was how Young spent it. It was revealed earlier this week that Ronnie Peoples, Vince Young’s former financial advisor, testified a few months ago stating that Young spent $300,000 of his Lockout loan to fund his birthday party. Peoples broke his silence partly because of Pro Player LLC, the company that provided Young with the loan, placed a $1.7 million judgment against him. Where Young can find the money for this is a mystery, and why someone would use a chunk of a loan for a gaudy party is perplexing, but it remind us that having a lot of money never means you’re going to keep a lot of money.
No Job is Safe
Just this past week three major companies, in the states and abroad, have announced major job cuts within their companies. First up, Dutch bank group ING announced they are making 2,400 cuts in their retail-banking operations. The decision is definitely influenced by stricter bank regulations and a weaker economy, but the cuts were made in ING’s biggest money maker because most people are more comfortable with online banking, with 84% of customer transactions occurring online. ING stated 1,000 job cuts would happen in Belgium, with the remaining 1,400 cuts in the Netherlands.
Following suit is British banking company Barclays, announcing they would cut 3,700 jobs after a “strategic review.” Barclays hasn’t had the cleanest reputation in the past; they’ve been accused in the past of miss selling payment protection insurance, and they were fined $290 million in 2012 after trying to rig the Libor Interest rate. Tack that on with sinking profits (they made £ 5.9 billion pretax season in 2011, they made only £246 million this year), Barclays states that these cuts will reduce costs by £1.7 billion. 1,800 cuts will come from corporate and investment bankers in Asia and the remaining 1,900 will be retail and business bankers from Europe.
If this is turning into a downer, wait! I’ve got one more! Thomas Reuters is also cutting jobs for similar reasons as Barclays. Losing roughly 4% of its workforce, 2,500 jobs will be cut as the “Financial and Risk” division of the company. After seeing a drop in shares and losing 2.6 billion last year, they are also hoping to reduce costs and change up the company from its profit-losing ways.
That’s the major financial mishaps discovered for this week, but if you’ve heard of anything else please feel free to post below!
The post This Week in Financial Blunders: Squatters, Football and Job Cuts appeared first on Quicken Loans Blog.