Archive for June, 2015

90% Of Student Loan Borrowers Denied Co-Signer Release

Posted on June 30, 2015 by Saldutti

Private student loan lenders rejected nine out of 10 co-signers who applied for a co-signer release from the loans, a service the lenders and servicers often advertise, according to the Consumer Financial Protection Bureau’s (CFPB) Student Loan Ombudsman’s Mid-year Update. “Private student loan companies should own up to borrowers when they qualify for valuable benefits, clean up contracts with surprises buried in the fine print, and step up to provide borrowers and their co-signers the service they deserve,” said CFPB Student Loan Ombudsman Rohit Chopra. The report collected information from industry participants, more than 3,100 private student loan complaints and…

Are You Invisible to Creditors?

Posted on June 29, 2015 by Saldutti

Are you a “credit invisible?” The Consumer Financial Protection Bureau defines credit invisibles as those adults whose credit histories are so limited that they don’t have three-digit credit scores. According to the bureau, 26 million U.S. adults have no credit histories with national reporting agencies TransUnion, Experian, and Equifax and, because of this, no FICO credit score. That’s a huge problem. Lenders today rely heavily on three-digit credit scores to determine which consumers are good lending risks. They also use these scores to determine the interest rates they charge on auto and mortgage loans. Consumers without credit scores, then, will…

Phone Scams on the Rise as Bank Fraud Goes Low-Tech

Posted on June 26, 2015 by Saldutti

Pindrop Security recently released a study that shows a 30% rise in phone fraud among financial institutions since 2013. The company, which provides call-center-security software, analyzed calling patterns at financial institutions, credit card issuers and online retailers.  It found that 1 in every 2,200 calls made to financial institutions and retailers is fraudulent, as is 1 in every 900 calls to credit card companies. Overall, more than 86.2 million calls per month in the U.S. are phone scams. According to Pindrop, call center fraud costs financial institutions $7 million to $15 million a year. The losses come from fake wire…

Most Consumers Still Intimidated By Home Buying Process

Posted on June 25, 2015 by Saldutti

Today, fewer consumers believe that it is difficult to get a mortgage compared with last year. However, the majority of respondents to an Ipsos and Wells Fargo survey still think the origination process is too tough and that there are too few homes on the market.  Changing these perceptions will require effort from stakeholders across the home buying and mortgage finance spectrum.  “There is a continuing need for lenders, Realtors, consumer groups and government to educate consumers to their options,” for financing a home, said Franklin Codel of Wells Fargo Home Mortgage. The survey found that 57% of the respondents agreed with…

29% of Americans Have No Savings

Posted on June 23, 2015 by Saldutti

Almost 3 in 10 Americans say they have no emergency savings, according to a survey just released by Bankrate.com.  That’s the highest number since Bankrate began tracking savings 5 years ago, and the culprit is a lag in income growth, which has failed to increase even as stocks and home prices have recovered. “The missing link in the economic recovery over the last few years has been the lack of growth in household income,” said Bankrate chief financial analyst Greg McBride. “That makes it very difficult for people to ramp up their savings.” Every time the car dies, an appliance…

Foreclosure Activity Hits 19-Month High

Posted on June 22, 2015 by Saldutti

US foreclosure activity reached a 19-month high in May as bank repossessions of homes continued to rise across the country. That doesn’t mean the housing market is falling back into disarray, however. The short-term rise is a signal that banks finally are working through a backlog of homes long-mired in the foreclosure process, which should lead to more positive data in the long run, according to experts. Foreclosure filings – default notices, scheduled auctions, and bank repossessions – increased 1% to more than 126,000 US properties in May 2015. Bank repossessions were down 1% from last month to nearly 45,000, according to…

Will Kids Raised During Recession Have a Fear of Credit?

Posted on June 19, 2015 by Saldutti

It’s not very surprising that clients of Young Americans Bank, which focuses on kids and college-age adults, are afraid of credit. But the worry is that such wariness will follow them into adulthood.  Children may not fully grasp the idea of borrowing when their parents foot the bill for everything. Richard Martinez, the bank’s president and chief executive, thinks bigger problems could be brewing for the balance sheets of tomorrow: The flood of mortgage foreclosures after the 2008 financial crisis could create a generation of reluctant borrowers.  “The recession showed this younger generation the possible negative effects of credit,” said…

Private Student-Loan Delinquencies are Declining

Posted on June 18, 2015 by Saldutti

The Consumer Bankers Association praised banks’ discipline on managing credit quality for student loans after a report showed a drop in delinquencies.  Both early- and late-stage delinquencies fell in the first quarter, compared to a year ago, according to MeasureOne’s Private Student Loan Performance Report. The rate of early-stage delinquencies, in which loans are 30 to 89 days past due, fell 38 basis points to 2.61%. Serious delinquencies, loans at least 90 days past due, fell by 34 basis points to 2.20%.  Net charge-offs declined 46 basis points to 2.71%. “Banks are working in a responsible manner with students,” said…

Underwater Homeowners Still Drowning in Mortgage Debt

Posted on June 17, 2015 by Saldutti

A decade after U.S. home sales peaked, 15.4% of owners in the first quarter owed more on their mortgages than their properties were worth, according to a report by Zillow Inc. While that’s down from a high of 31.4% in 2012, it’s still alarmingly above the 1 or 2% that marks a healthy market, said Stan Humphries, Zillow’s chief economist.  Worse yet: The pace of healing is losing steam. The blotch stains the economy by restraining the housing recovery and by preventing the job market from becoming even more vigorous. It also will probably exacerbate wealth inequality for years to come…