by Structured Settlement Watchdog®
Rising interest rates squeeze buyers of structured settlement payments as their investors seek alternative ways to invest with less risk. Originators must charge higher rates to keep investors interested and this leads to rising costs for sellers of structured settlement payment rights. Rising discount rates also make repeat transactions less attractive to sellers. A higher the discount rate means sellers receive less money in exchange for the rights to their payments if they choose to sell. It's bad enough that they may be looking at 50 cents or worse on the dollar if they sell, but it could have a greater impact, particularly on long money and distant life contingent payments
One insider opined that there may be some structured settlement factoring originators may resort to increasing outrageous behavior out of desperation more compete for an smaller pie. We've already seen one Maryland based structured settlement factoring outfit being banned from doing business in Maryland for 7 years due to fraud.
Beware Predators From Canada
Genex Capital notoriously warned US citizens about rising rates in 2009. Here is an excerpt from The Genex Capital CEO's "Hemorrhoid" on Structured Settlements that I reported about in November 2010. It still appears on Genex Capital's website at time of this posting.
"This national pension elimination has many people wondering what options exist for those employees who devoted years of service with the confident knowledge that a pension would supply them with the necessary financial security to retire? Unfortunately, there is no precise answer and, ultimately, these individuals are forced to find alternative means of financial support through their retirement years on their own.
Understandably, this national pension minimizing effect has been the impetus causing many recipients of structured settlements to begin to question the security offered in these government backed guaranteed payments. Given the seemingly overnight disappearance of pension plans, it is not challenging to understand why many structured settlement recipients are responsibly wondering how much longer their promised periodic payments will be maintained. In all actuality, no one can predict the future, but structured settlements could certainly begin to disappear too".
If the prospects of insurers paying out on structured settlements was so bad, why would Genex Capital buy Structured Settlement-Quotes from Andrew Cravenho for purportedly hundreds of thousands of dollars in 2011 and turn it into a brand jacking website in 2012 and set up Assured Annuity to peddle structured settlement derivatives scam labeled as "secondary market annuities".
Anyone who followed Roger Proctor's advice in regard to interest rate warnings in the last 8-9 years, might have had "roid rage" having lost lots of money when interest rates fell and Genex Capital and its investors capitalized on the fears it manufactured. Ironically structured settlement derivatives have been sold to retirees by SMA scan labelers, underscoring the conflicts in the marketing approach. How can Genex Capital, or any similar company warn selling annuitants that structured settlement payments could disappear, to get them in the door, while the same cash flows out slip out the back door to investors, including retirees, as stable cash flows?