Smart Borrower Blog

Rising Subprime Auto Delinquencies Causing Concern

Oct 29th, 2014 @ 7:37 PM by Amber Nelson

The success of the U.S. auto loan market over the past few years may have come at a cost, as loans made to subprime credit borrowers are failing at a much higher rate than expected. A new report from Citigroup Inc. reported that the delinquency rate for poor credit buyers rose 15 percent in the past year to 3.8 percent. Compared to the 0.4 percent delinquency rate of prime buyers, subprime rates are starting to alarm investors and government regulators. The losses from those delinquent loans are adding up as well. In the fourth quarter of 2013, banks charged-off an... Read full article »

Looser Mortgage Credit Requirements Approved By Regulators

Oct 22nd, 2014 @ 7:47 PM by Amber Nelson

The desire to bring investors back into the mortgage bond market has outweighed the desire to make home loans safe from another housing bubble. U.S. mortgage regulators approved new rules Tuesday that would make it much easier for borrowers to get a mortgage, but could leave the market open to risks again. After the housing market crash in 2007, Congress passed the Dodd-Frank Act of 2010 that imposed all sorts of tougher restrictions on U.S. lenders, including mortgage lenders. In order to encourage bankers to make sound home loans, part of the Act required lenders to keep a small portion... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Lenders Target Good Credit Customers for Personal Loans

Oct 15th, 2014 @ 5:34 PM by Amber Nelson

Although they have been synonymous outrageously high interest rates in the past, unsecured personal loans are not being marketed toward those with highest credit scores as a way to consolidate debt, buy cars or even do some home improvements. Total personal loan originations have jumped up to $34.5 billion during the first half of 2014, an 8.7 percent increase from the year before, according to credit-reporting agency Equifax. That’s the largest increase in at least six years. Part of that increase has come from less traditional personal loan borrowers – those with stellar credit. Lenders are offering these customers lower... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Consumer Debt Delinquencies Fall To Record Lows

Oct 8th, 2014 @ 7:47 PM by Amber Nelson

Consumers did better with everything from credit cards to mortgages in the second quarter, according to a new report from the American Bankers Association, helping to push consumer delinquencies to an all-time record low. The ABA composite ratio, a measure of eight closed-end installment loan categories, fell to 1.57 percent in the second quarter, down from 1.63 percent in the first. That is a record low for that ratio and far below the 15-year average of 2.32 percent. “Strong job growth, rising income, low interest rates and falling debt levels have led to consumers having a greater capacity to repay... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Almost 1 Million Fewer Homeowners Are Underwater Since Last Quarter

Oct 1st, 2014 @ 8:15 PM by Amber Nelson

The latest quarter helped almost one million American homes return to positive equity, according to a new report from property data firm CoreLogic, a very positive sign for the housing market’s near future. During the second quarter of 2014, prices rose enough on roughly 950,000 properties to move them out of “underwater” status. A property is considered underwater or in negative equity when the owners owe more on the mortgage than the home is worth. That leaves just 5.3 million homes, or 10.7 percent of all properties underwater. Compared with the second quarter, the percentage of home owners with negative... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

CFPB To Expand Oversight in Auto Lending Industry

Sep 24th, 2014 @ 7:20 PM by Amber Nelson

The Consumer Finance Protection Bureau released a proposal on Wednesday announcing plans to extend its oversight to nonbank auto finance companies in the U.S. Previously these companies, like those owned by auto manufacturers Toyota and Ford, had no federal supervision. “Many people depend on auto financing to pay for the car they need to get to work,” said CFPB Director Richard Cordray in a statement. “Nonbank auto finance companies extend hundreds of billions of dollars in credit to American consumers, yet they have never been supervised at the federal level…Today’s proposal would extend our oversight, allowing us to root out... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Big Banks See Benefit of Small Business Loans

Sep 17th, 2014 @ 7:39 PM by Amber Nelson

For the third straight month, the nation’s largest banks have approved small business loans at a record high rate, according to Biz2Credit.com. This is great news for U.S. entrepreneurs who have seen icy business credit conditions since the Great Recession. The Biz2Credit Small Business Lending Index – from a survey of 1,000 small business loan applications – found that big banks approved 20.4 percent of all loans submitted in August, a new all-time high and up from 20.1 percent in July. Compared with one year ago, the approval rate is up a whopping 15 percent among big banks (those with... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Student Loan Debt Spikes 84 Percent Since Recession

Sep 10th, 2014 @ 8:53 PM by Amber Nelson

The total amount of student loan debt held by Americans hit a new high recently, according to credit bureau Experian, and that debt is affecting both young and old. Americans now carry a total of $1.2 trillion in college debt, an all-time high and an 84 percent increase since the Great Recession. That debt burden is spread out across 40 million people, an increase from 29 million in 2008. Every borrower has at least one student loan but the average borrower, however, has approximately four student loans, nearly double the roughly two-and-a-half from six years ago. The average balance for... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Fannie Mae Rethinks 2014 Housing Forecast

Sep 3rd, 2014 @ 7:57 PM by Amber Nelson

Mortgage finance company Fannie Mae downgraded its 2014 and 2015 predictions in August for the U.S. housing market, forecasting less rosy outcomes based on the year’s lackluster performance so far. Compared with its July forecast, the Fannie Mae August forecast reduced its expectations for new single-family home sales by 11 percent to 431,000 for the year, down from 486,000. The forecast for single-family home construction starts was also slashed 8 percent from July, to 642,000 in 2014, down from 696,000. Fannie predicts now that total sales of existing homes will fall 3.5 percent this year from 2013, topping out at... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Cash is No Longer King – At Least for Millennials

Aug 27th, 2014 @ 8:11 PM by Amber Nelson

Plastic – credit and debt cards – have become so easy to use that one in three Americans prefers to use cards to pay for small, in-person purchases of $5 or less. The trend away from cash is most pronounced among the millennial generation – those between the ages of 18 to 29 – according to a new survey conducted for CreditCards.com Fifty-one percent of millennials preferred to use plastic for purchases under $5, the only generation with a majority in that category. Compare that with those in the over-65 age group, where 82 percent prefer to use cash. The... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

Auto Loans Growth Remains Strong As Mortgage Debt Drops Off

Aug 20th, 2014 @ 8:04 PM by Amber Nelson

Total household debt fell slightly in the second quarter, according to the latest report from the Federal Reserve Bank of New York, as Americans pulled back on mortgage debt. “A slight decline in real estate-related balances, consistent with broader housing market developments, contributed to a flat quarter for total outstanding household debt,” said Donghoon Lee, senior economist at the New York Fed. “Meanwhile, we observe continued strength in the auto loan market with the largest volume of originations since 2006.” In the second quarter, mortgage debt fell $69 billion from the first quarter, although it is up $255 billion from... more »

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.