Thursday, May 23, 2019

Are You Considering a Strategic Default for your Student Loan?

Student loan default is widely regarded as a giant financial mistake and most people only go into default as a last result or because they think they have no other options. However, over the last few years, a growing culture of intentional student loan defaulters have risen whose stated goal is to "fight back against student loan debt servitude." Rallying around mantras like "student loans are economic terrorism" and "why we must cancel all student loans to benefit the economy", these borrowers are not only defaulting on their loans due to their own financial situation, but they are also looking to drive social and political change as a result of their actions. Let's take a look at what happens with student loan default, and how these borrowers are trying to send a message. Read more at Forbes.

Unless you qualify for student loan forgiveness, paying down your college debt is the best way to get rid of it. Even bankruptcy is unlikely to provide a solution. As a result, you may be considering intentionally defaulting on your student loan debt to see if you can settle for less than what you owe. This practice is common with other types of debts, and there are several debt settlement companies who can help you do it. When it comes to student loan debt, however, strategic default is not a good idea. Here’s why and what to do instead. Read more at Saving for College.

Monday, April 29, 2019

Latest Mortgage Loan and Research News

New York Launches Its Own Consumer Protection Finance Bureau 
The NYDFS announced Monday that it is creating a new division that will focus on consumer protection and financial enforcement. The new division combines the previously separate Enforcement and Financial Frauds and Consumer Protection divisions into one entity. According to the NYDFS, the new Consumer Protection and Financial Enforcement Division will focus on “protecting and educating consumers and fighting consumer fraud, as well as ensuring that regulated entities comply with New York and federal law in relation to their activities serving the public.” The division will also work to develop “investigative leads and intelligence” that aid in the NYDFS’ efforts to enforce the state’s banking, insurance, and financial services laws; will focus on cybersecurity events; and will also aid in the development of new supervisory, regulatory, and enforcement policies. Read More at Housing Wire

Residential Mortgage Default Forecasting: How Much Do Price Trends Matter?
Buyers who buy at a peak of the price cycle and subsequently face significant price declines are much more likely to default, regardless of personal circumstances with respect to employment, life trigger events, or credit rating status. Equity cushion is a critical element in default forecasting models, along with accurate valuations at the time of purchase and mortgage underwriting. Read More at Collateral Analytics.

Thursday, March 21, 2019

Latest Mortgage and Financial News - 3-21-2019

Wall Street's Love Affair with Risky Repackaged Debt 
The financial markets today are looking very much like they did a decade or so ago. And that can mean only one scary thing: Trouble is imminent. Just as they did in much of 2007 and 2008, before the markets exploded in a crisis of epic proportions, investors in the debt market, which is even larger than the equity market, are feverishly chasing higher yields and are too eagerly buying up the risky securities that will deliver those yields without demanding the proper premium for the risks being taken. A decade ago, the high-yield investment du jour pushed by Wall Street was mortgage-backed securities — home mortgages that had been packaged up and sold as “safe” investments all over the world. Nowadays bankers and traders are pushing another form of supposedly “safe” investment, the “collateralized loan obligation,” or C.L.O. C.L.O.s are nothing more than a package of risky corporate loans made to companies with less than stellar credit. Read More at NY Times.

The Federal Reserve is Preparing for QE4
The Federal Reserve has announced an end to rate hikes for 2019. QT will end when the Fed balance sheet reaches $3.5 trillion. The impact on commercial bank net interest margins is not to be underestimated. On March 20, 2019, the Federal Reserve announced its intentions to cease interest rate hikes for the remainder of 2019. In this article I will analyze the possible consequences of this event. Read More at Seeking Alpha.