Archive for June, 2009

When Interest Rates go Up the Value of your Structured Settlement Goes Down!

Sunday, June 28th, 2009

You may have heard in the media in recent weeks that interest rates have bottomed and are slowly creeping back up.  

I believe that this is the beginning of a new cycle of incremental increases in interest rates over the next few years.

When interest rates go up, the present value of a person’s structured settlement goes down.  This is a simple truth.

As such, if you are considering selling your structured settlement, now is the time to get the best rate.

At Genex Capital we lock in your price quote for 48 hours so that you can have an opportunity to decide.  Once the 48 hour period has expired and unless we have made special arrangements with you prior, you must get a new price quote.  This practice becomes all the more important during a period of moving rates.

If you have received a price quote to sell your structured settlement but elected not to proceed, please contact one of our Customer Service Experts Toll Free at 800-348-3098 and they will be pleased to update your quote and explain the various options with you.

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Discount Rates

Monday, June 15th, 2009

Sellers of structured settlements have been asking why are discount rates for their cases so high when the Federally set interest rate is so low.

The answer to this is basic economics:

1.  The Fed rate is low because there is reduced market activity and the Fed is trying to stimulate such activity.

2.  Demand for money is high but lending supply is low (this is what they mean when they say money is tight.)

3.  While the Fed rate is low, try to get a mortgage or loan, or worse yet a credit card interest rate that is in the single digits.

At Genex Capital we compete with the credit markets for our money. We must offer our investors a reasonable rate of return that is competitive in the industry.  

As such, the discount rate that we offer our sellers is based on a number of complex variables.

We still are able to offer the best rates in the business because we have low overhead and because we operate on a volume basis so our margins per transaction are low.

Please contact one of our Customer Service Experts at 800-348-3098 and they will be happy to discuss the details of your particular case.

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Beware Those Bearing False Gifts

Saturday, June 6th, 2009

I have been in the structured settlement funding business for 7 years.  In the past 6 months I have observed some funding companies make a commitment to buy certain structured settlement annuity payments from payees but then either be unwilling or unable to complete the transaction at the committed price, either abandoning the deal altogether or attempting to negotiate a lower price at the 11th hour.   While the well publicized credit crisis has affected our industry and this may have been a legitimate cause for deal renegotiation a few months back, it would seem that the practice described above is continuing to this day.

In my view it is wrong for a funding company to negotiate a price that at inception it knows it cannot honor or has a reasonable expectation it cannot honor so as to lock in a seller and then later conduct a bait and switch game.

Genex Capital does not and shall never engage in such practice.  Our prices are based on current funding commitments, not future hopeful commitments.

If you are a prospective seller, you should do your homework on the funding company you are considering engaging to make sure they have a solid track record.

I would be happy to personally discuss our track record with any prospect considering Genex Capital.  Feel free to contact me at 302-356-1522.

Roger Proctor, CEO

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