Posts Tagged ‘loans’

Banks Prepare for Credit Card Defaults

Posted on October 20, 2017 by Laura Lam

Credit card delinquencies increased for three consecutive months, adding to signs that consumers in the U.S. are having a tough time paying their debt.  According to recent reports, credit card data from JPMorgan, Discover Financial Services and Bank of America show that the number of delinquencies is on the rise. The reason for the uptick in the number of people who can’t pay their credit card bills is due to lenders going after consumers with less-than-stellar credit ratings. Although this practice is intended to fuel growth in a low-interest rate environment, the lower credit quality is coming back to bite…

Mortgage Lending Getting Riskier

Posted on October 09, 2017 by Laura Lam

During the second quarter this year, the risk in mortgage lending inched up as the market shifted toward an increased share of investor loans, according to the Q2 2017 Housing Credit Index released by Core Logic.  The index increased to 117 during the second quarter, up a full 20 points from the second quarter last year. However, even after this increase, the credit risk in the second quarter is still within the levels seen from 2001 to 2003, a timeframe that is considered to be a normal baseline for credit risk. The chart shows that while mortgage risk remains at…

Banks See Slower Loan Growth, Higher Charge-Offs

Posted on June 12, 2017 by Laura Lam

FDIC-insured banks reported that the pace of loan growth slowed in the first quarter and that charge-offs on loans to individuals increased. But banks still recorded robust earnings for the period.  Total loans and leases fell by $8.1 billion, or 0.1% year-over-year, in the 3 months ended March 31, led by credit card loans, which posted a seasonal decline of $43.7 billion, or 5.5%. In its Quarterly Banking Profile, the FDIC attributed the decline to cardholders paying down outstanding balances, but residential mortgages also fell, by 0.5%. Credit to businesses offset some of the decline, with commercial and industrial loans up…

Marketplace Lending Can Thrive with Innovation

Posted on May 12, 2016 by Laura Lam

For most consumers, the relationship with a marketplace lender begins and ends with getting a personal loan.  But what if, like Google and Amazon before them, fintech companies perfected the core business they began with and then expanded into other areas? Google started as a search engine and Amazon as an online bookseller. The pair are now among the Top 10 most valuable companies in the Fortune 500. What the future might look like for consumers and lenders is at the heart of a new analysis from professional services firm PwC.  “What I see is a more holistic solution around…

Housing predictions for 2013

Posted on January 08, 2013 by Saldutti

The bust of the housing market five years ago created one of the cheapest times to buy. Across many parts of the U.S., including some of the priciest markets like New York and Honolulu, it has become cheaper to purchase a home than rent, according to Trulia’s Rent vs. Buy report. Record-low interest rates on mortgages have also made buying more affordable.  That’s changing, however. In 2012, prices hit bottom. Hooray! While that tells us the market is healing, it could also mean buying will be less affordable in 2013. Asking prices for homes for sale rose 3.8% in November from a year earlier…

6 Credit Report Items That Scare Lenders

Posted on September 20, 2011 by Saldutti

You pay your bills on time and never miss a payment. If you’re still having trouble with credit, something on your credit report could be scaring lenders.  Everyone knows the big gremlins that haunt credit reports: items such as bankruptcies, foreclosures and even late or missed payments. But less dramatic items can also spark some anxiety in skittish lenders. When you apply for a loan or a card account, lenders review your credit score and pull your credit report. Or they may take that report and pump it through one of their own scoring systems.  If they don’t like what they…

U.S. Debt Downgrade – How Will It Affect Me?

Posted on August 10, 2011 by Saldutti

Lawmakers weren’t able to prevent the country from losing its coveted AAA debt rating.  Although the downgrade late Friday by Standard & Poor’s was historic, it wasn’t entirely unexpected. The three main credit agencies, which also include Moody’s Investors Service and Fitch Ratings, had warned during the fight over the debt ceiling that if Congress did not cut spending far enough, the country faced a downgrade.  And just like a lower consumer credit score implies that a borrower is a less reliable, a lower credit rating for government bonds implies there is more risk involved in lending money to the…

Freaking Out About the Economy

Posted on August 02, 2011 by Saldutti

All over America, restlessness and frustration are growing. It has now been almost three years since the great financial crash of 2008, and yet the U.S. economy is still a complete and total mess.  In fact, there are all sorts of signs that things are about to get even worse, and the American people are just about fed up.  Virtually every major poll, survey and measure of consumer confidence shows that the American people are becoming more pessimistic about the economy. We have never faced such an extended economic downturn in modern U.S. history, and a lot of people are…

Money 101: Life Lessons for Kids

Posted on September 01, 2010 by Saldutti

Did you know … The average college graduate has nearly $20,000 in debt? Nearly one in five 18 to 24year-olds is in “debt hardship?” Undergraduates are carrying record-high credit card balances – the average (mean) balance is $3,173? Now more than ever before, it is vital that we teach our teens and young adults about credit.  One of the reasons so many Americans seem mired in bad debt is that financial education is practically nonexistent.  The life lessons we have learned through the years are not regularly taught in schools.  While access to credit might be harder to acquire now…