Archive for March, 2017

Auto Finance Fraud Could Hit $6 Billion

Posted on March 30, 2017 by Laura Lam

PointPredictive, a provider of fraud solutions to banks and finance companies, details a new analysis confirming that auto financing fraud risk has been rising for several years, but remains hidden in credit losses.  PointPredictive estimates the annual value of auto finance originations that contain some element of misrepresentation may be as high as $6 billion in 2017, which is twice as much as 2016 estimates. The analysis revealed that auto financing fraud can be broken into 3 separate categories: Known fraud that finance companies have been able to identify. Hidden fraud that ends up misclassified as early or first payment…

Student Loan Defaults on the Rise

Posted on March 29, 2017 by Laura Lam

A new analysis of government data by the Consumer Federation of America found that the number of Americans in default on their student loans jumped by nearly 17% last year.  As of the end of 2016, there were 4.2 million Federal Direct Loan borrowers in default, meaning they’ve not made a payment in more than 270 days. That’s up from 3.6 million at the end of 2015. “Despite all improvements in the economy, student loan borrowers are still struggling,” said Rohit Chopra, senior fellow at the Consumer Federation of America (CFA).  As of the end of 2016, 42.4 million Americans…

Continued Good News For Housing

Posted on March 28, 2017 by Laura Lam

After several years of job gains combined with the hope that the best is yet to come in 2017, consumer confidence surged, according to the new consumer report from the National Association of Realtors.  In the first quarter of 2017, NAR’s quarterly Housing Opportunities and Market Experience survey found that the number of households that believe the economy is improving soared to its highest share in the survey’s 5-quarter history – 62%. This is up from 54% in the fourth quarter and 48% in March 2016. While this surge in confidence is not exactly unexpected, it is encouraging news for the…

Foreclosure Activity Hits 11-Year Low

Posted on March 24, 2017 by Laura Lam

Foreclosure activity dropped in February to an 11-year low, according to new data from ATTOM Data Solutions.  This decrease marks the lowest point since November 2005, and the 17th consecutive month of annual decreases.  But despite this drop, 10 states still saw an increase in foreclosure activity. States that saw the largest increases include New Jersey with an increase of 16%, Delaware with 14%, Louisiana with 12%, Alabama with 10% and Hawaii with 8%.  Some cities also saw strong increases, contrary to the national trend. Houston, Texas, for example, increased 97% from an abnormally low February 2016. Other cities such as…

Justice Department Declares CFPB ‘Unconstitutional’

Posted on March 23, 2017 by Laura Lam

The case of of PHH Corporation vs. Consumer Financial Protection Bureau just took a turn that is simultaneously shocking and completely expected at the same time.  In a major reversal, the Justice Department filed a brief last Friday in a lawsuit against the Consumer Financial Protection Bureau, arguing that the consumer watchdog agency’s structure is unconstitutional.  In the lawsuit, PHH argues that the CFPB’s structure gives it too much power. In its brief, the Justice Department argued that the president should be able to remove the CFPB director at will. Currently the head of the CFPB can only be removed in cases of “inefficiency, neglect of duty…

Builder Confidence at Highest Level in 12 Years

Posted on March 22, 2017 by Laura Lam

Builder confidence in the market for newly-built single-family homes jumped six points to a level of 71 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since June 2005.  “Builders are buoyed by President Trump’s actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting,” said NAHB Chairman Granger MacDonald. “While builders are clearly confident, we expect some moderation in the index moving forward,” said NAHB Chief Economist Robert Dietz. “Builders continue to face a number of challenges, including rising…

Student Loan Debt: A $1.3 Trillion Crisis

Posted on March 21, 2017 by Laura Lam

According to the New York Federal Reserve, U.S. student loan debt has soared to $1.3 trillion becoming the second highest consumer debt category, more than both credit cards and auto loans.  Washington College President and former Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair said the student loan debt crisis could spark next financial crisis, since it is a “tremendous drag” on the U.S. economy. During the financial crisis of 2008–09, excessive mortgage debt collapsed consumer spending as more families opted to pay off debt. Bair said the same dynamic could be seen if the student debt bubble bursts.  “With…

Consumer Sentiment Rises to New High

Posted on March 20, 2017 by Laura Lam

Consumer confidence rose in March as Americans were more satisfied than any time in 16 years with the current state of their finances and the economy, while remaining sharply divided along party lines about the outlook.  The University of Michigan said that its preliminary index of sentiment increased to 97.6 from 96.3 in February. The index of current conditions jumped three points to 114.5, the highest reading since November 2000. Households reported net gains in incomes and wealth at the strongest levels in a decade, while Republicans were “much more optimistic” than Democrats about expectations for their finances, according to…

Luck of the Irish Will Bring “Gold” to Retailers

Posted on March 17, 2017 by Laura Lam

Americans will spend more than ever as they put on their favorite green outfits to celebrate St. Patrick’s Day this year, the National Retail Federation said today. According to NRF’s annual survey conducted by Prosper Insights & Analytics, spending for St. Patrick’s Day is expected to reach $5.3 billion, an all-time high in the survey’s 13-year history. More than 139 million Americans plan to celebrate the Irish holiday, and are expected to spend an average of $37.92 per person, up from last year’s $35.37 and a new record that tops the previous record of $36.52 set in 2015. The $5.3…