Consumer Lending

CFPB report reveals issues that may default student loan borrowers

The CFPB released a report on Tuesday that revealed having a co-signer on a student loan may inadvertently allow a student loan servicer to put the borrower into default, even if payments have been made on time. According to the report, approximately 90 percent of private student loans had co-signers in 2011—a practice that may allow... Read More...

NCUA: Credit unions can provide alternative to costly payday loans

Representatives from the NCUA’s Office of Small Credit Union Initiatives and Office of Examination and Insurance told credit unions on Wednesday that the institutions can provide a viable alternative to predatory payday loans. NCUA representatives told credit unions during Wednesday’s webinar that payday loans can provide credit unions with... Read More...

NCUA to offer free small dollar lending webinar for credit unions

The National Credit Union Administration will offer a webinar for credit unions later this month on how small dollar, short-term loans to consumers can improve an institution’s portfolio. The webinar, which will be held at 2 p.m. EST on April 16, will be led by Tom Penna, Jr., an economic development specialist at NCUA’s Office of Small... Read More...

ICBA’s Jorde criticizes USPS plan to provide financial services

Terry J. Jorde, the senior executive vice president of the Independent Community Bankers of America, recently said that a proposal to provide small-dollar loans through the U.S. Postal Service “throws good money after bad.” In January, the USPS inspector general proposed providing non-bank financial services to the underbanked in a plan the... Read More...

U.K.’s credEcard launches Visa debit card for instant loan disbursement

U.K.-based e-money account and rewards provider credEcard announced on Tuesday the launch of its instant issue loan card, which will allow credit unions to issue instant loans to members through a single-use Visa debit card. The launch of the product eliminates the need for large amounts of cash and may be able to help deter members from... Read More...

“Cooling off” periods for payday loans have minimal impact on renewals

A report released by the CFPB on Tuesday showed that “cooling off” periods aimed at discouraging borrowers from taking out multiple payday loans in the same day have had little impact on rollovers and renewals. According to the report, which is based on data from more than 12 million payday loans over a one-year period, over 80 percent of... Read More...

Ohio Supreme Court rules oral agreements on loan mods not binding

The Ohio Supreme Court ruled in favor of lenders earlier this month when it said that loan modifications and their corresponding terms must be in writing and signed by all parties to make them legally binding. The ruling came following an appeal by FirstMerit—a $24.1 billion financial services firm headquartered in Akron, Ohio, operating in... Read More...

Black Knight introduces VeraStrat Scores to prioritize borrower contact

Black Knight Financial Services introduced a solution last week that will allow servicers to prioritize delinquent borrower contact to assist them in identifying and contacting the highest risk borrowers first. VeraStrat Scores is a loan-level indicator of borrower risk and historical payment pattern. It is a three-digit number, where the first... Read More...

Plan to expand PAYE student loan program may lower default risk

Fitch Ratings said last week that President Obama’s plan to expand the Pay as You Earn plan for student loan borrowers may lower default risk and boost prepayments in Federal Family Education Loan Program asset-backed security portfolios. The Pay as You Earn program—launched last year—is designed to keep monthly student loan payments... Read More...

HomeStreet to sell residential mortgages in Pacific Northwest

HomeStreet announced on Wednesday that it plans to sell two pools of residential loans in Washington, Oregon, Idaho and Hawaii. The first pool is a group of fixed-rate residential mortgages with total outstanding principal balances of approximately $105 million, and the second pool is comprised of adjustable rate residential mortgages with... Read More...

GAO unable to determine impact of Stafford loan limit increases

A report released last week by the GAO found that an increase in student loan limits and the impact of the 2008 financial crisis will make it difficult to determine whether the Stafford loan limit increases affected the cost of college. According to the report, college prices have been on the rise since the 2008 and 2009 Stafford loan limit... Read More...

NMBA to host 2014 Lenders Conference in Albuquerque

The New Mexico Bankers Association will host the 2014 Lenders Conference in Albuquerque on March 7. The conference—for which the cost of attendance is $150 for NMBA members and $300 for non-members, including meals, breaks and session materials—will begin at 8 a.m. with registration and continental breakfast. NMBA Executive Vice... Read More...

New Horizons head John Barrickman to lead TBA workshop on commercial lending

New Horizons Financial Group President John Barrickman will lecture at a two-day workshop on commercial lending techniques sponsored by the Tennessee Bankers Association from Feb. 27 to 28 at Nashville’s Loews Vanderbilt Hotel. The workshop, which is designed for loan review personnel, commercial loan officers and branch managers, allows... Read More...

Prudential Mortgage provides $15.8 billion in financing in 2013

Prudential Mortgage Capital Co. announced on Monday that it provided $15.8 billion in financing in 2013, a 30 percent increase from 2012’s $12.2 billion. The $15.8 billion in financing includes $1.2 billion for new loans in Europe and Japan, of which $848 million was originated by the London office in Europe, $2.2 billion in conventional... Read More...

GAO: Many eligible borrowers do not take advantage of SCRA protections

A new report released by the Government Accountability Office this month found that while some servicemembers benefitted from the six percent interest rate cap under the Servicemembers Civil Relief Act, many eligible borrowers did not take advantage of the protection. The SCRA seeks to protect active eligible servicemembers in the event their... Read More...

Wells Fargo and Citi sell mortgage servicing rights

Wells Fargo announced last week that its bank subsidiary signed an agreement to sell residential mortgage servicing rights on approximately 184,000 loans worth $39 billion to Ocwen Loan Servicing. The 184,000 loans represent approximately two percent of Wells Fargo Bank’s total residential servicing portfolio as of the end of the fourth... Read More...

DriveItNow Credit Center technology aims to streamline consumer auto financing process

DriveItNow announced on Wednesday the pilot release of its Credit Center technology, which is designed to streamline the consumer financing process on automotive dealer websites and portals. Credit Center allows online shoppers to explore various credit services from one platform without having to provide sensitive information such as Social... Read More...

Cornerstone Credit Union League members originated 11,000 loans per day in 2013

The Cornerstone Credit Union League, which represents nearly 700 credit unions in Texas, Oklahoma and Arkansas, said on Tuesday that its members originated over 11,000 new loans every day in 2013. According to Cornerstone, its member credit unions injected more than $118 million into local economies every business day through lending... Read More...

Three major U.S. banks discontinue deposit advance products

Three major banks, including Wells Fargo, U.S. Bancorp and Fifth Third Bank, announced last week that they would stop offering deposit advance products, a kind of payday loan that came under criticism by regulators last year. The banks announced the move last week. Wells Fargo said it would discontinue its deposit advance service on Feb. 1,... Read More...

Democratic lawmakers introduce Delaney-Carney-Himes housing finance reform plan

Democratic Reps. John K. Delaney (Md.), John Carney (Del.) and Jim Himes (Conn.), all of whom are members of the House Financial Services Committee, outlined a proposal last week to reform the housing finance system using private sector market mechanisms. The proposal, which they plan to introduce in the spring, is designed to create incentives... Read More...

Report: Exceeding income borrowers among most credit-dependent consumers

A recent report from the Center for Financial Services Innovation identified consumer needs in accessing small-dollar loans, revealing that borrowers who exceed their income are “among the most credit-dependent customers” and have the fewest options in the financial marketplace. The report said exceeding income borrowers generally had the... Read More...

Sallie Mae borrowers post default rate 30 percent lower than national average in 2013

According to recent figures released by Sallie Mae, federal loan customers who have loans with the mortgage servicer posted a default rate 30 percent lower than the national average in 2013. The servicer’s private loan charge-off rate has improved significantly since the financial crisis and currently stands at less than three percent. More... Read More...

Demand for new home purchases declines by 11 percent in December

Data released by the Mortgage Bankers Association last week showed that demand for new home purchases fell by 11 percent in December, following a sharp decline of 18 percent in November. MBA’s Builder Application Survey showed the average loan size of new homes rose slightly from $295,523 in November to reach $300,444 in... Read More...

House hears testimony from witnesses on negative impact of new mortgage rules

A House subcommittee heard testimony from witnesses last week on how new mortgage rules that took effect earlier this month will negatively impact homeownership and reduce credit availability and access to credit. The new rules, which include the qualified mortgage and ability-to-repay rules, are mandated under the 2010 Dodd-Frank Act. The... Read More...

Borrowers with lower credit scores may have easier time obtaining mortgages

The average credit score for approved mortgages fell to 727 in December—compared to 748 the previous year—indicating that borrowers with lower credit scores may be able to more easily obtain a mortgage. According to data released by Ellie Mae on Wednesday, 46 percent of mortgages closed in December had applicants with credit scores higher... Read More...

CFPB extends comment period on debt collection practices, impact on consumers

The CFPB recently extended the comment period on an advance notice of proposed rulemaking regarding debt collection practices and their impact on consumers. The original deadline for public comment has been moved from Feb. 10 to Feb. 28. The CFPB is seeking comment on the accuracy of information provided to third-party debt collectors and... Read More...

RBS Citizens Financial introduces new refinance options for private student loans

RBS Citizens Financial Group announced on Tuesday the introduction of the Citizens Bank Education and Charter One Education Refinance Loans, which are designed to help private student borrowers refinance or consolidate loans. “Private student loan borrowers have historically had a limited number of refinancing options available to them,”... Read More...

Survey: Commercial, multifamily lending expected to increase in 2014

A recent survey by the Mortgage Bankers Association indicated that commercial and multifamily lending is expected to increase in the coming year, as lenders seek to expand and reach new customers. The survey showed 91 percent of commercial and multifamily mortgage origination firms expect originations to increase in 2014, and nearly half expect... Read More...

New FICO, Equifax credit capacity score may encourage lending

Equifax and FICO announced last week that tests of a new score for measuring consumer credit capacity showed the system can identify groups of consumers who could handle more credit, which could encourage lending. The FICO Credit Capacity Index—build on Equifax’s Risk Navigator 4—was tested on two large credit portfolios in the U.K. The... Read More...

CFPB releases revised consumer publications required under TILA, RESPA

The CFPB released last week revised publications that lenders are required to provide to consumers under the Truth in Lending and Real Estate Settlement Procedures Act. The publications—released in conjunction with the effective date of the agency’s new mortgage rules—cover adjustable-rate mortgages, settlement costs and home equity lines... Read More...

CUNA urges USDA to consider credit unions in developing rural loan programs

The Credit Union National Association urged the U.S. Department of Agriculture on Friday to consider credit unions as a lending source in developing programs to boost lending in rural areas. Last month, the USDA announced sweeping changes to its Single Family Housing Guaranteed Loan Program aimed at bolstering rural housing markets, boosting... Read More...

Consumer loan delinquencies fall to record low in third quarter

Data released by the American Bankers Association on Thursday showed that consumer loan delinquencies fell to a record low during the third quarter amid improved economic conditions. The composite ratio, which follows delinquencies in eight loan categories, fell 13 basis points to 1.63 percent of all accounts, well below the 15-year average of... Read More...

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