4 Jul, 2011
The U.S. Department of Housing and Urban Development recently launched a new foreclosure assistance initiative known as the Emergency Homeowners’ Loan Program, which will give more than $1 billion to consumers nationwide who fell behind on their mortgage payments due to job loss or unforeseen medical bills. Approved homeowners will receive a maximum of $50,000 in interest-free loans over two years to help them catch up on their home loan payments.
The HUD program was supposed to begin last year, but there were significant delays in setting it up, and now the government agency must distribute its $1 billion in aid before the end of the government’s fiscal year on September 30. In
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3 Jul, 2011
Card Use Fewer Defaults Profits
More card use, increased transaction value and fewer defaults caused profits for Discover Financial Services to rocket to $593 million in the three-month period ending on May 31. That was up from just $185 million in the same quarter last year.
Discover profits rose largely as a result of far fewer defaults suffered by the company. In all, the number of charged off accounts slipped to just 5.01 percent of all balances – worth about $577 million. That’s down from the previous year’s totals of 8.56 percent and more than $1 billion in losses.
In addition, Discover saw the value of transactions it processed rise 18 percent to $71.62 billion in the quarter. The t
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3 Jul, 2011
Debt Diet Diet
As we kick off The Debt Diet—and introduce you to our five participants—first, let me say thank you to everyone who applied to be a part of this project. I know that sharing information on your financial lives, and your financial struggles, isn’t easy and I appreciate the trust and faith you have in me. I wish I could have chosen every one of you, but in the end I picked the five participants for a few reasons: I was looking for variety in the situations, readiness for change in the applications (because if you’re not ready, this program is not going to work), and—quite honestly—people I felt The Debt Diet could help.
My heart went out to one applicant in particular, a 52-year-old man who suddenly lost his mother a year and a half ago and has seen his spending out of control since then. He has over
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3 Jul, 2011
Living Wills Wills
What if your bank is too big too fail, but fails anyway? As part of the sweeping bank reform law known as Dodd-Frank, big banks must write up living wills for themselves, essentially creating roadmaps for federal regulators on how to dismantle them if the companies drive themselves into bankruptcy and federal ownership (like Lehman Brothers did in 2008).
But the requirement to write living wills, called resolution plans, is getting lots of pushback from some major banks, who fear they could be turning the keys to their fortunes over not just to federal bureaucrats, but also their competitors.
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3 Jul, 2011
By now, most people are aware of credit scores and have a basic understanding of how they work and buy into the concept that how you have managed your credit in the past is likely a good predictor of how you will manage credit in the future. The art and science of leveraging a consumer’s information to predict different types of behavior is continually evolving as the amount of available information on people increases—and the technology to mine that data for predictive insights is enhanced.
If you think about it, how a person manages their credit provides a general indication of an overall level of responsibility that correlates to other behaviors in addition to credit risk. For example, studies consistently show that consumers with lower credit risk are also lower insurance risk (less likely to file an auto insurance claim). As su
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3 Jul, 2011
Debt Experts Debt Experts Weigh Experts Weigh Weigh
What happens if you are trying your best to make your credit card payments, but your card issuer won’t work with you and insists you make higher payments than you can afford? Debt experts weigh in to help this reader understand her options with her credit card payments:
My daughter lost her job a little over a year ago and she was the main bread winner for our family. Since then, she, my grandson and I have been living on my Social Security and part-time job. I was unable to pay anything on my Capital One account for five months. It wasn’t consecutive. I didn
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