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Apache is functioning normally

September 26, 2023 by Brett Tams
Apache is functioning normally

Federal student loan payments resuming on Oct. 1 will negatively affect consumer loan asset quality, including credit card, auto and, to a lesser extent, residential mortgages. However, the overall effect will be modest, according to a Moody’s Analytics report. 

On Oct. 1, repayments are due to restart on Department of Education (DOE) federal student loans (Direct Student Loans), which began accruing interest again on Sept. 1.

In total, 24 million borrowers whose payments were suspended since the onset of the COVID-19 pandemic will owe an average of $275 per month when federal student loan payments resume, per Moody’s Analytics estimates. 

“As the interest burden on student debt increases, we expect the additional financial obligation will modestly strain borrowers’ ability to pay,” Moody’s analysts said in a report. 

According to the analysts, job market conditions remain the primary driver of consumer loan performance. In August, the unemployment rate was 3.8%, compared to 3.5% in July. Although it’s a low rate by historical standards, unemployment is at its highest level since February 2022. 

“Although student loans are non-dischargeable in bankruptcy, their priority in a consumer’s debt repayment hierarchy is low relative to the other major consumer debt classes,” Moody’s analysts said.

They added: “Borrowers are much more likely to prioritize servicing mortgage or auto loans and even credit cards since they stand to lose their house or car or access to credit or credit card rewards if they fall behind on such consumer loans.”

The report included data showing that delinquencies in major consumer debt classes are rising but are still at low levels.

For mortgage debt, the share of performing loans that were 30 or more days delinquent went from less than 2% in Q3 2021 to about 2.5% in Q2 2023. Credit card delinquencies jumped from 4% to about 7% in the same period. Meanwhile, auto loans rose from about 5% to 7%. 

Source: housingwire.com

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Apache is functioning normally

September 26, 2023 by Brett Tams
Apache is functioning normally

By the end of 2022, 27 million Americans had an outstanding personal loan balance with the average amount owed being $11,116. The interest rates of these loans are also the highest they’ve been since 2011 at 11.23 percent.

Sources: TransUnion and the St. Louis Federal Reserve

As of the second quarter in 2022, Americans owed over $192 billion in personal loans, according to TransUnion®.  This was a 31% increase from 2021 and is thought to be due to the financial hardships Americans experienced during the COVID pandemic that overwhelmed the nation in 2020.

If you’re one of the many Americans who took out a personal loan in early 2022, the good news is that interest rates were very low, according to the St. Louis Federal Reserve. Since then, rates have reached new highs, so many Americans are struggling to pay back these loans.

Understanding the current trends in personal loans can help you see where you stand financially. We’ve gathered 10 personal loan statistics that include the most common reasons people take out personal loans, delinquency rates and which states have the highest personal loan debt to help you make better financial decisions if you’re accumulating too much debt.

In This Piece

Must-know Personal Loan Statistic Findings

Millions of Americans are taking out personal loans, and the following are some of the most interesting facts on the topic.

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  • 27 million Americans have personal loan debt (TransUnion)
  • At the end of 2022, the average new loan amount was $8,018 (TransUnion)
  • The average amount owed in personal loan debt was $11,116 at the end of 2022 (TransUnion)
  • In November of 2022, personal loan interest rates were the highest they’ve been since May of 2011 (St. Louis Federal Reserve Bank)
  • New Jersey has the highest average new personal loan account balance at $13,494 (TransUnion)

Average Personal Loan Debt in America

According to TransUnion, Americans owed roughly $9,896 on average as of the first quarter in 2022, the highest it’s been in recent years. Americans took out loans at an average of $6,656 per loan, which was over $1,000 more than in the previous quarter of 2022.

The amount owed per borrower dropped significantly between Q2 and Q3 in 2022, but by the end of the fourth quarter, the average amount owed increased by over 100 percent with the new loan amount dropping to $8,018.

The increase in personal loan debt may have been due to the inflation the country experienced in 2022. TransUnion also reports that there were more loans approved to “super prime borrowers,” or those with credit scores over 720, stating, “On a percentage basis, personal loan originations for subprime and near-prime borrowers increased in the single digits [year over year] whereas super prime borrowers experienced a 33% rise in the third quarter.”

How Many Americans Have Personal Loans?

The amount of Americans taking out personal loans increased 12 percent from 23.9 million in the first quarter of 2022 to 27 million by the fourth quarter.

Prior to the beginning of the COVID-19 pandemic, the total amount of personal loan borrowers was 23.3 million at the end of 2019 and dropped to 21.2 million by the end of 2020. The number of borrowers then grew back to 22.8 million in the following fourth quarter of 2021 and continued to grow as the pandemic regressed.

Quarter

Q4 2022 Average new account balance

Q4 2019

23.3 million

Q4 2020

21.2 million

Q4 2021

22.8 million

Q4 2022

27 million

The Most Common Reasons to Take Out a Personal Loan

LendingTree conducted a survey of their users in 2022 and found that the most common reason consumers took out personal loans was to pay down other debts. Over 58 percent of borrowers used these loans to pay down debt, and the other main reasons included credit card refinancing, home improvements and other major purchases.

Rank

Reason

Percentage of respondents

1

Debt consolidation

41%

2

Other

17.3%

3

Credit card refinance

17.3%

4

Home improvements

6.2%

5

Major purchase

4.1%

6

Medical expenses

3.0%

7

Moving/relocation

2.9%

8

Everyday bills

2.9%

9

Car financing

1.7%

10

Car repair

1.1%

11

Business

0.9%

12

Vacation

0.5%

13

Homebuying

0.4%

14

Wedding expenses

0.4%

Average Personal Loan Interest Rates

During the second quarter of 2022, the Federal Reserve Bank of St. Louis reported that interest rates reached an all-time low of 8.73 percent. By the end of the year, these rates were the highest they’ve been since 2011 at over 11.2 percent.

Personal Loan Debt Compared to Other Debts

Based on TransUnion data, personal loans account for less than four percent of the total number of accounts when compared to other types of loans, such as credit cards, home and auto loans.

Account type

Number of accounts

Percentage of accounts

Credit card

518.4 million

76.3%

Auto loan

81.2 million

11.9%

Mortgage loan

52.6 million

7.83%

Personal loan

27 million

3.97%

It’s also important to note that not all credit card accounts carry a balance.

Personal Loan Delinquency Rates

Delinquent accounts are accounts 60 days or more past due and can hurt your credit score. The Q4 TransUnion report shows that the delinquency rate dropped year over year between 2019 and 2020, but was up 53 percent as of 2022, with an overall delinquency rate of 4.14 percent.

Quarter

Delinquency rate

Q4 2019

3.48%

Q4 2020

2.7%

Q4 2021

3%

Q4 2022

4.14%

TransUnion’s 2022 Credit Snapshot shows that in the last month of the report, those with the lowest credit scores have the highest delinquency rate of 23.9 percent, while super prime borrowers are only at 12 percent.

Credit score range

Percentage of delinquent borrowers

Subprime (300 to 600)

23.9%

Near prime (601 to 660)

23.7%

Prime (661 to 720)

23.3%

Prime plus (721 to 780)

17%

Super prime (781 to 850)

12%

Personal Loan Statistics by State

TransUnion’s 2022 Credit Snapshot reports that New Jersey has the highest average new account balance at over $13,000, and Oklahoma has the lowest at $3,170. Although Oklahoma has the lowest new account balance, they have the highest delinquency rate at 7.73 percent.

State

Q4 2022 Average new account balance

Q4 2022 Delinquency rate

AK

$10,296

2.9%

AL

$4,362

6.59%

AR

$7,089

5.18%

AZ

$9,343

3.78%

CA

$10,454

3.47%

CO

$12,322

2.03%

CT

$11,712

2.57%

D.C.

$9,016

6.55%

DE

$9,146

4.04%

FL

$8,379

3.94%

GA

$8,621

5.18%

HI

$12,224

2.28%

IA

$7,443

2.94%

ID

$9,072

4.38%

IL

$9,236

3.46%

IN

$7,439

2.97%

KS

$8,349

3.05%

KY

$6,875

3.36%

LA

$6,797

5.07%

MA

$12,518

2.24%

MD

$10,956

2.77%

ME

$6,651

1.67%

MI

$7,052

3.21%

MN

$10,692

3.73%

MO

$6,522

6.69%

MS

$5,179

4.96%

MT

$9,326

2.53%

NC

$10,035

3.03%

ND

$8,051

1.89%

NE

$7,755

3.65%

NH

$11,719

2.31%

NJ

$13,494

3.49%

NM

$5,418

6.31%

NV

$8,839

3.74%

NY

$11,843

2.77%

OH

$7,595

3.75%

OK

$3,170

7.73%

OR

$10,523

2.93%

PA

$10,418

3.06%

RI

$8,744

2.14%

SC

$5,924

4.89%

SD

$9,945

2.06%

TN

$5,355

5.38%

TX

$4,952

6.33%

UT

$7,966

4.23%

VA

$9,875

3.37%

VT

$6,180

0.82%

WA

$9,570

2.94%

WI

$6,489

3.95%

WV

$10,864

1.96%

WY

$7,698

2.66%

Personal Loan Statistics by Type of Lender

More and more Americans are turning to financial technology companies, also known as FinTech, for their personal loans. These are online banking services that are done via a company’s website or mobile app, and 32.9 percent of all personal loans are done through these types of companies.

Lender type

Distribution of total balances

FinTech

32.9%

Banks

20.5%

Credit unions

19.7%

Other finance companies

26.9%

Can Personal Loan Debt Affect Your Credit Score?

If you’re one of the 27 million Americans with a personal loan, you don’t have to let your debt harm your credit score. As you’ve learned from these personal loan statistics, many Americans have turned to personal loans to pay off other debts, but many people are delinquent with their payments, which can hurt their scores.

Credit.com provides a variety of credit tools and tips to help you work to repair and improve your credit. You can learn more about our services, like ExtraCredit, or click here to get your free credit report card.

Source: credit.com

Posted in: Business, Loans, Personal Loans Tagged: 2, 2019, 2020, 2021, 2022, 2023, About, ak, al, All, app, ar, Auto, auto loan, Auto Loans, average, az, balance, Bank, Banking, banks, bills, borrowers, business, ca, car, car repair, co, common, companies, company, Consumers, country, covid, COVID-19, COVID-19 pandemic, Credit, credit card, credit cards, Credit Report, credit score, credit score range, credit scores, Credit unions, ct, data, Debt, debt consolidation, Debts, decisions, Delinquency rate, expenses, ExtraCredit, Federal Reserve, Finance, financial, Financial Wize, FinancialWize, financing, Fintech, first, fl, Free, free credit report, ga, good, Grow, hi, home, Home Improvements, homebuying, ia, id, il, improvements, in, Inflation, interest, interest rates, ks, ky, LA, Learn, learned, lender, LendingTree, loan, loan interest, Loans, low, Main, Make, md, me, Medical, medical expenses, MI, mn, mo, mobile, Mobile App, More, Mortgage, mortgage loan, Moving, ms, NC, ne, new, New Jersey, News, nh, NJ, nm, november, nv, ny, oh, ok, Oklahoma, Online Banking, or, Originations, Other, pa, pandemic, payments, percent, Personal, personal loan, Personal Loans, points, PRIOR, Purchase, Q3, rate, Rates, Refinance, refinancing, relocation, repair, report, ri, right, rise, sc, score, sd, second, single, St. Louis, states, statistics, survey, Technology, time, tips, tn, tools, TransUnion, trends, tx, ut, VA, vacation, vt, wa, Wedding, wi, work, wv, wy

Apache is functioning normally

September 25, 2023 by Brett Tams

Many people were thrown into financial turmoil at the beginning of the COVID-19 pandemic. Previously secure jobs disappeared, and monthly payments went from affordable to impossible overnight. A year later, borrowers are still catching up—and some are struggling to make ends meet. So, if you can’t afford your car payment, what are your options?

We have eight solutions to an unaffordable car loan in this article. Some are easier to implement than others—and some come with long-term credit implications:

  1. Modify Your Auto Loan
  2. Refinance Your Vehicle Loan
  3. Trade in Your Car
  4. Let Someone Else Assume Your Loan
  5. Sell Your Vehicle
  6. Turn the Keys In
  7. Let Your Car Be Repossessed
  8. File for Bankruptcy

1. Modify Your Auto Loan

How can you lower your car payments without refinancing? Before you do anything else, speak to your lender about modifying your auto loan. Call your auto loan company as soon as you can, and tell them about your financial troubles. Ask if they have any relief options for borrowers, including loan modifications.

Many lenders made changes to their modification policies in response to the COVID-19 pandemic. Temporary loan forbearance and extension programs, for instance, help borrowers get back on track. 

Perhaps surprisingly, many lenders let borrowers in good standing pause their auto loans for a month once a year. Of course, you’ll have to make an extra payment at the end of your loan term to make up the difference—and you might have a little extra interest to pay.

2. Refinance Your Vehicle Loan

How do you get out of a car loan you can’t afford? The answer might be to refinance your vehicle. If you have a good payment history and a strong credit profile, use it to your advantage. Here are two ways to play the refinancing game:

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Let’s imagine you bought your car for $20,000 two years ago. Your original 60-month auto loan came with a 5.5% interest rate, and your monthly payments are $382.02. Your current loan balance is $12,600.

If you extend your loan by five years, your monthly payments will drop to $241. You’ll have $141 more spending money each month—but you’ll pay more in interest over the life of your loan, plus you’ll have to make payments for a longer time period.

3. Trade in Your Car

If you can’t afford your car payment any more, consider trading in your vehicle. Think about your automotive needs—could you get away with a smaller car, for instance? Do you need a truck, or would it be easier to park a sedan in your driveway? 

Swapping your SUV for a smaller model isn’t just environmentally friendly—it’ll also cost less to run. Switching from a new luxury vehicle to a slightly older regular brand auto, on the other hand, could cut your insurance bill significantly. Either choice will reduce your car payment.

If you do decide to trade in your car, get quotes from several dealerships. Then, negotiate a fair price with your favorite dealership and choose an alternative vehicle. If you’re not upside-down in your current loan—if you don’t owe more than it’s worth—you might even be able to trade upto a newer vehicle with better loan terms.

4. Let Someone Else Assume Your Loan

Some loans and leases are “assumable,” which means that they’re transferable from one party to the next. If you can’t make your loan payments any more but you want to avoid damaging your credit, consider passing the loan, and the vehicle, to someone else. 

Before you agree to pass your car on, talk to your lender. Most lenders have minimum credit and income requirements for buyers—and the person you transfer your vehicle to will need to meet these terms. 

5. Sell Your Vehicle

Do you need a vehicle right now, or can you use public transportation until your finances settle? If buses or trains are an option in your area, consider selling your vehicle privately and using the money to pay off the remainder of your loan. Doing so could help you escape a car payment altogether—plus private sales nearly almost generate more money than dealer trade-ins. 

6. Turn the Keys In

Can you give your car back to the finance company? You sure can! Also called “voluntary repossession” or “voluntary surrender,” walking away from your vehicle is a last-resort option if you can’t refinance or sell your car.

Unfortunately, there are consequences associated with turning in your keys. On the one hand, the repo man won’t pay you a personal visit, which can save embarrassment. On the other, the lender might still try to collect money from you if you owe more than they can get for the vehicle at auction. A voluntary repossession will also show up on your credit report.

If you do decide to turn your keys in, contact your lender and tell them your intentions. Your lender will guide you through the process and let you know when and where to hand over your car.

7. Let Your Car Be Repossessed

The alternative to voluntary surrender is straight repossession. This option is perhaps the most stressful, and it can severely affect your credit. In a nutshell, you simply wait until you’re so behind with payments that your lender decides to repossess the vehicle. Then, your car—and anything you leave inside—is towed away. You might want to consider this as a last option—carefully look at your resources and consider exhausting your other options before you decide.

8. File for Bankruptcy

If you’re in a huge financial hole and you owe a lot of money beyond your car payment, you could consider bankruptcy. Bankruptcy is complicated and can pull your credit down for a decade, so it’s not an option to consider if there are any alternatives open to you. Before proceeding, take a good look at your finances and contact a well-regarded bankruptcy attorney. 

Take Care of Your Finances with Credit.com

Whatever you decide to do, it’s important to keep track of your credit. Sign up with Credit Report Card to view your Experian VantageScore 3.0 and see a helpful credit snapshot, which you can use to create a financial plan.

Source: credit.com

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Apache is functioning normally

September 24, 2023 by Brett Tams
Apache is functioning normally

With most of the year under our belt, the holiday season is just around the corner. No matter what you celebrate, this season is full of food, celebrating and spending time with loved ones.

While you’re hard at work prepping for the holiday season, scammers are too. A survey conducted by Experian found that a full 1 in 4. Americans have been a victim of identity theft or fraud in the holiday season. If you’re worried about scammers this year, don’t worry—we’ve got tips on how to look for holiday shopping scams this season.

When the pandemic hit in early 2020, COVID-19 scams became a popular method for criminals to get access to your information and steal your identity. However, the holidays are when these scammers go into overdrive, meaning it’s important to be extra cautious as you do your online shopping and holiday giving. Here are some of the most common holiday shopping scams to be aware of.

Illegitimate Charities

Many people use the holidays as a reason to be a bit more generous, but be careful before you make that donation. Many scammers create fake charities in an attempt to get you to donate. They get your money—and possibly access to your identity info—and no good ever comes from that generosity. 

Check for social media presence, news stories, financial records and proof that any charity you’re considering donating to actually exists and has a good reputation.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

Fake Online Stores

Online shopping is a convenient way to check off all the items on your list without having to actually brave the holiday crowds. However, it’s important to ensure that the sites you’re shopping from are actually legitimate. Scammers create fake online storefronts—sometimes even mimicking well-known retailers—and you don’t know it’s fake until the merchandise never comes or you start seeing evidence of identity fraud.

Empty Gift Cards

Gift cards are the perfect choice if you’re not sure what someone on your gift-giving list wants or if they like to pick out items themselves. But selling gift cards that have a $0 balance or have already expired is a common and remarkably easy scam. This happens most often on local sales sites, such as Craigslist and Facebook Marketplace.

Email Scams

Have you ever gotten an email about something you bought online—but you never actually purchased anything from that retailer? Maybe the email said you needed to reset your password or gave you a link to track your package. These are phishing email scams designed to get you to enter your personal info so scammers can use it for identity theft.

Shipping Problems

One of the biggest worries that comes with online shopping—especially with the supply chain issues that have come as a result of the COVID-19 pandemic—is whether the gifts will arrive on time. Criminals capitalize on this fear by sending out emails, texts and other communications letting you know there’s been an issue with your package. You’re asked to provide personal information such as your address, credit card info and birth date to confirm your order, but all you’re really doing is giving scammers the information they need to steal your identity.

While the holidays are a common time for shopping scams, it doesn’t mean there’s nothing you can do about it. Learn what to look for and how to protect yourself from identity theft with these tips.

1. Pay Attention to Website URLs

Online searches can lead you to scammer-run websites that unleash computer malware or collect credit card numbers for identity theft. Carefully read website domain names. Watch for unfamiliar vendors or missing letters, misspellings or other tweaks to the name of a legitimate company. Pay special attention to the last letters. For example, tiffanyco.mn indicates a Mongolia-based website, not the legitimate website for Tiffany & Co., tiffany.com.

2. Make Sure the Site Is Legitimate

Before ordering, check the “Contact Us” page for a phone number and physical address and the “Terms and Conditions” link detailing return policies and such. Unlike legitimate vendors, bogus websites are less likely to post these—or they’ll provide them in a suspicious manner, such as via a faxed request only.

How do you know if a holiday website is legit? Check the Better Business Bureau as well as Facebook and Google reviews before you buy from a new place. If the business doesn’t have any social media or online presence other than the website, that’s a red flag. 

3. Only Buy Gift Cards From Retailers

Buy gift cards directly from the retailer and avoid shopping for discount gift cards through local swap sites. You may also want to buy gift cards online or from the checkout instead of the display racks, which are less secure. Fraudsters can peel off stickers to glean gift card codes, replace them in envelopes and wait for an unsuspecting shopper to buy them. Once purchased and activated, they enter stolen codes at the retailer’s website to make online purchases—leaving the intended recipient with a useless card.

4. Look for HTTPS Sites

When buying online, check the URL to see whether the website starts with “http://” or “https://.” The “S” is for “secure” and is your best bet for safe shopping. Some legitimate retailers may use http sites, but your information is much more vulnerable to attack in this case because it’s easier for hackers to get to it. Even with a secure page, avoid using public Wi-Fi hotspots for online shopping or other financial transactions.

5. Use Prepaid Gift Cards for Online Shopping

Consider buying prepaid cards for online shopping instead of using your actual debit or credit card. These cards are often reloadable for ease of use, and if your information does happen to be stolen, hackers will only have access to the amount on the card and not your entire bank account.

6. Take Care on Craigslist

On Craigslist or when answering local classified ads, deal only with sellers who provide a phone number you can verify. Don’t rely solely on email correspondence. Assume any request for wire-transfer payment is a scam, and be suspicious of prepaid debit card transactions. Using PayPal or a credit card is your safest bets.

7. Avoid Deals That Seem Too Good to Be True

Stay clear of prices from private sellers that seem too good to be true or are tied to hard-luck stories, such as a need to sell quickly because of divorce or military deployment. No one is selling the latest gaming console for only $50, no matter how hard up they are. These are common scams to get advance payment—and you’ll likely get no merchandise.

8. Don’t Open Holiday E-Cards From People You Don’t Know

Delete E-Cards or general holiday emails if you don’t know the sender. These mass-sent greetings likely contain malware. Legitimate card notifications should include a confirmation code to safely open the card at the issuing website.

9. Beware of Undeliverable Package Emails

Avoid emails claiming that FedEx, UPS, DHL or the U.S. Postal Service has an undeliverable package with links for details. The links will install malware that can log keystrokes to steal computer files and passwords. Unless you previously provided an email address, courier services won’t contact you this way. This scam baits you to call for details—at which point you’ll be tricked into making an expensive overseas call or revealing your personal and financial information. Look up the callback number yourself if you’re curious.

Gearing up for the holidays? Go ahead and enjoy your holiday shopping this year. Just be a little careful—keep an eye out for anything suspicious and make sure that any website you buy from is legitimate.

If you’re worried that you might already be a victim of identity theft or just want to keep a closer eye on your credit, ExtraCredit can help you know what’s going on with your credit report and spot identity theft as soon as it happens.

Source: credit.com

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Apache is functioning normally

September 22, 2023 by Brett Tams
Apache is functioning normally

Marketing, CRM, Fair Lending, HELOC, Non-QM Products; Webinars and Training Next Week; Why do People Move?

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Rob Chrisman

7 Hours, 28 Min ago

Sometimes I send this Commentary out from some pretty nice places, sometimes not. Today comes from the tarmac at the Newark Airport, in Row 22, sitting next to some hairy guy who’s snoring and apparently went with the “Garlic Lover’s Pizza” last night. You can decide which category today fits in. “What do you call a small pepper in the autumn? A little chili.” Tomorrow is the fall equinox. Autumn? Autumnal? Different ways of saying similar things? Do you know the difference between a loan, a mortgage, a lien, a note, and a deed of trust? There are differences, just like there are differences in the reasons why people move. Unlike the convicted felon that I spent some time with yesterday, wanting a newer, better, or larger house or apartment has been the most common specific reason cited for moves over the past two years. That’s followed by establishing one’s own household, evidenced by a change in marital status becoming a more common reason for moving in 2022 than in 2021. The percentage of movers reporting housing unit upgrades declined, suggesting a reversal of a boom in housing demand that happened in 2020, early in the COVID-19 pandemic. A quarter of movers reported family-related reasons for their move, the second most often-cited general reason for moving in 2022 and in several recent years. (Today’s podcast can be found here and this week’s is sponsored by the Trade-In Mortgage powered by Calque. Homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Lenders can help their clients negotiate a lower purchase price, reduce their interest payments, and eliminate PMI. Hear an interview with Mayer Brown LLP’s Lauren B. Pryor on M&A activity in the mortgage space and what makes for a successful transaction in the current environment.)

Lender and Broker Software, Programs, and Services

“Cheers to 20 Years! We are proud to announce the 20 Year Anniversary for Carrington Mortgage! It’s been an incredible two decades filled with trust, growth, and a commitment to serving our partners. As we celebrate this remarkable achievement, we want to express our heartfelt gratitude for your continued support. We look forward to many more years of serving our partners. We remain committed to being the industry’s leader in Non-QM solution lending. Our team of experts is ready to help you and your borrowers with a new home purchase or a refinance, all done in a timely and professional manner. Our program and product suite includes Non-QM, FHA, VA, USDA & GSE. Our Non-QM program offers you and your borrowers features and flexibility you may not find anywhere else. We’re here to help. Please contact us for more information about our products and services.”

In challenging down economic times, Loan Vision is your solution to maximizing profitability and reducing costs in your business. With Loan Vision, companies see improvements of 25% to 35% decrease in days to close the books, 20% reduction in accounting headcount, complete LOS to G/L automation, and improved reporting and visibility that allow for better business decisions. Don’t accept a competitive disadvantage or get caught flat footed in a recovering market. To improve your cash position, gain a competitive edge, and prepare your business for sustained growth, contact Carl Wooloff to schedule a call today.

From what people are saying, The Loan Store has consistently been among the “pricing leaders” and “process leaders” with agency loans, and they’ve also really been making a nice name for themselves with their Quick-Pay HELOCs. TLS is funding HELOCs 100% within 3-5 days (and paying 175 bps in comp), and that’s a great tool for LOs looking to expand their business. Plus, word on the street is that TLS will be expanding HELOCs to Texas soon, so that’s something else for Lone Star State LO’s to get excited about. Regardless of where you’ve set up shop, price out a HELOC in the TLS/Figure HELOC portal. Or, if you haven’t signed up with TLS yet, do that here.

Recent Trends in Fair Lending Compliance! When the DOJ announced its Combatting Redlining Initiative in October 2021, it was the department’s “most aggressive and coordinated” enforcement effort against financial institutions. The initiative has cost financial institutions $40 million in the first half of 2023 alone. The DOJ and regulators have not let up on enforcement actions against financial institutions (banks, credit unions, mortgage companies, and other lenders) violating fair lending compliance laws. In fact, regulatory agencies have expanded the scope of fair lending enforcement. A recent article from the experts at Ncontracts highlights the significance of recent fair lending enforcement trends and what it means for your fair lending program. Read the full article.

Earlier this month, Apple announced the 15th version of its amazing, do-everything iPhone. It’s hard to imagine, but what if Steve Jobs never invented the iPhone? What if we all carried one device to make calls, and a completely different device to send a text? This is exactly what many lenders do today with their CRM software. They have one CRM for their retail loan officers, a different CRM for their direct-to-consumer team, and another CRM for their wholesale account executives. Wouldn’t it be nice to manage all of your business channels in just one CRM? That’s what OptifiNow Flex is: a retail, wholesale, correspondent, reverse, home equity and private money CRM that can be personalized to fit your business needs. Reach out to us to learn more and see why OptifiNow is the iPhone of mortgage CRM!

Attention Mortgage Lenders! Discover the secrets to thriving in this competitive market with our FREE white paper, tailored specifically for you. Written by Seroka Brand Development, the mortgage industry’s leading marketing and public relations company, this exclusive guide reveals top marketing and PR strategies for 2023. As the industry faces its current set of challenges, effective yet cost-conscious marketing is more crucial than ever for companies like yours, competing for every opportunity. Learn six impactful ways to reach your target market and secure success through the rest of 2023 and beyond. Don’t miss out on this invaluable resource: download your FREE white paper now.

Training, Webinars, and Events Next Week

A good place to start is here, and click on “events” for conferences in the future. Next week is the last week of September already?! Wasn’t it just Labor Day? Let’s see what’s up.

According to data from Gartner, two in three companies say customer experience is the primary area where they will compete for business. Lenders, how is your business utilizing customer feedback to drive revenue growth in today’s challenging market? Need help? Join STRATMOR Group’s customer experience experts as well as peer lenders for STRATMOR’s Customer Experience Workshop on September 25, 26 and 27. This highly interactive, virtual workshop is designed to give lenders specific, actionable ideas: you’ll learn how to optimize your loan processes to maximize repeat and referral business and achieve your growth goals in challenging market conditions. Register today!

Tuesday the 26th is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman, and sponsored by National MI. Tune in every Tuesday at 10AM PT to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode.

On September 26, 2-3PM ET, FHA’s free, virtual webinar will assist FHA-approved lenders (and their auditors) with their upcoming Annual Recertification and provide information on how to successfully submit an acceptable recertification package via the Lender Electronic Assessment Portal (LEAP). For detailed information, closely review the LEAP User Manual.

Free, on-site, FHA Underwriting Training in Philadelphia, PA., September 26, 9:00 AM to 11:30 AM (Eastern) will provide an overview of FHA underwriting procedures and addresses several industry-related frequently asked questions (FAQs) as outlined in FHA’s Single Family Housing Policy Handbook 4000.1. This training will also take an in-depth look at a variety of topics including credit, income, and asset (CIA) documentation; automated underwriting systems (AUS); closing; and more.

Free, on-site, FHA Appraisal Training in Philadelphia, PA., September 26, 1:00 PM – 3:30 PM (Eastern) will provide an overview of the appraisal requirements outlined in FHA’s Single Family Housing Policy Handbook 4000.1. The training topics will include property inspection requirements, appraisal validity period, manufactured homes, water and septic, attic and crawl spaces inspection, and the FHA Appraiser Roster.

If you are looking for the housing policy and fintech event of the year to watch from the comfort of your office, Housing Finance Strategies’ #HousingDC23 is it. The agenda is published, and Complimentary Registration is now available. Sign up to view the premium content offered virtually and accessible to you starting September 26th.

If your credit union’s due diligence for quality control relies only on last-minute adjustments during post-closing processes, chances are you’re spending too much time putting out fires rather than adequately serving members’ needs. Market changes demand a more comprehensive and proactive approach to due diligence, and the experts at ACES Quality Management have the wherewithal to help you make that adjustment. Tune into this Inside Track webinar on September 27th at 1 pm CST to learn the why’s and how’s of improving your QC processes.

Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining.

California MBA upcoming Mortgage Quality and Compliance Committee webinar, Navigating the Future of Work: Adapting Return to Office Policies, on Thursday September 28th at 11 A.M. PST. Expert panelists will provide valuable insight on the ever-changing work dynamics, the challenges of managing remote and in-house teams, and MLO enhanced requirements in CA (and other states).

AzAMP Annual EXPO, Luncheon, and 8-Hour NMLS CE Class, September 27–28, at the We-Ko-Pa Resort and Casino. Begin your experience on Wednesday, Sept. 27 with Part 1 of NMLS CE class. Full day of events begins on Thursday, September 28 including NMLS CE class Part 2, Luncheon with Keynote Speakers Allen Beydoun, UWM Executive Vice President and Robbie and Rob Chrisman, The Chrisman Commentary Daily Mortgage News, followed by the AzAMP Expo.

Watch on demand, at your leisure: Millennials and Gen Z’ers represent the largest group of first-time homebuyers. In less than 10 years, 3.1 million will have entered the market. Of these buyers, roughly 75 percent of them report checking social media daily. Making social media a necessary strategy for loan officers. Join Homebot’s VP of Marketing, Ashley Remstad and Mortgage Advisor Sosi Avila as they discuss key strategies and tactics for using social media to your advantage. Register for the webinar here.

The NCEO 2023 Fall Forum in Houston is September 26-28. Featuring top industry experts and thought leaders, the forum will update you on the latest trends and best practices in employee ownership. Network with other employee owners and industry professionals from across the country, sharing ideas, challenges, and successes.

Friday the 29th is The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT in “The Rundown”.

Capital Markets

Remember when all the “smartest guys in the room” were telling us that an inverted yield curve was a nearly sure sign of a recession? I haven’t heard that one lately. Even with the Fed just signaling lower interest rate volatility going forward, in theory translating into tightening MBS spreads and lower rates, mortgage rates still jumped by over .125 percent yesterday thanks to falling bond prices and “non-trivial stack decompression.” Much of the decrease in bond prices over the past couple of days stems from the markets still trying to fight the Fed. The yield curve remains highly inverted and will only unwind once the hard landing scenario becomes less probable.

On the data front, Existing home sales decreased 0.7 percent month-over-month in August to a seasonally adjusted annual rate of 4.04 million as sales were down 15 percent from the same period a year ago due to a well-known confluence of factors: higher mortgage rates, higher prices, limited supply, a lack of mobility, and homeowners who are reluctant to give up a low-rate mortgage. Keep in mind that an economic recession could also bring about an increase in inventory, as those who lose jobs may be forced to sell their homes and those uncertain about their jobs will not have the confidence to buy a home. While the overall U.S. economy remains resilient, there are growing signs starting to show U.S. households tightening budgets or starting to reduce discretionary spending.

Today’s economic calendar includes flash PMIs for much of Europe where modest increases are expected versus the prior readings. Domestically, S&P Global PMIs will be released later this morning, though the bigger headline is the resumption of Fed speakers following Wednesday’s FOMC events. Markets will receive remarks from Governor Cook, Boston President Collins, Minneapolis President Kashkari, and San Francisco President Daly. We begin the day with Agency MBS prices unchanged, the 10-year unchanged from Thursday at 4.48 percent, and the 2-year at 5.13.

Employment

“What distinguishes a company in the mortgage lending game? For Evergreen Home LoansTM, it’s an unwavering dedication to customer experience. As Evergreen’s CMO, Haavard Sterri, puts it, “At Evergreen Home Loans, customer satisfaction isn’t just a metric; it’s our mission. We go above and beyond to ensure our clients not only receive exceptional financial solutions but also feel valued every step of the way.” Take the Security Plus program, a gem that offers clients pre-approved, underwritten loans before house hunting begins. But why should job seekers pay attention? A firm that champions customer needs typically scores high on employee satisfaction. At Evergreen, you’re not a replaceable part; you’re integral to a collective mission of transforming the homebuying process. In a crowded field, Evergreen shines by marrying excellent customer service with fulfilling career opportunities. If you’re on the job hunt and value innovation, teamwork, and a relentless focus on the customer, Evergreen beckons. To view all open Evergreen careers visit our careers page.”

In the Northwest and California, Banner Bank is searching for Mortgage Loan Officers looking to create lasting Realtor and builder relationships at a bank focused on the market today. Banner has opportunities for lenders looking for local decision making with FHA, VA, USDA, state bond and true Portfolio lending opportunities along with servicing retained Fannie and Freddie loans to assist in client retention. Additional highlighted products cover CRA lending with private label no payment down payment assistance to help assist all borrowers with the right opportunity. Banner is the right fit for an established team, or the individual looking to grow their business and take the next step in their career. Please send resumes to Aaron Miller.

As a mortgage sales professional have you ever thought, “What if I could focus on only the things that actually grow my business, flipping the hourglass and spending 80 percent of my time on what I do best: building relationships?” Or “What if I could surround myself with sales support that is truly team inspired, results driven marketing and customer obsessed headache-free process?” Welcome to radius financial group! They started radius with one main focus: to offer a better value proposition than any other bank or mortgage company in the country for you, your borrowers and your referral partners. radius can help you grow your business, have a better quality of life, and make more money. For confidential inquires please contact Carla Herrera.

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Source: mortgagenewsdaily.com

Posted in: Refinance, Renting Tagged: 2, 2020, 2021, 2022, 2023, About, advisor, age, agencies, All, anniversary, apartment, app, apple, Appraisal, assessment, asset, attic, automation, autumn, Bank, banks, before, best, best practices, bond, Books, borrowers, boston, Broker, brown, budgets, builder, building, business, Buy, buy a home, buyers, ca, california, Capital, Capital markets, Career, Careers, Carrington, cash, casino, closing, Commentary, common, companies, company, Compliance, conditions, Conferences, confidence, correspondent, cost, costs, country, couple, covid, COVID-19, COVID-19 pandemic, CRA, Credit, credit union, Credit unions, CRM, curve, Customer Experience, customer service, data, decades, decision, decisions, deed, Development, discover, down payment, Down Payment Assistance, due diligence, Economy, Employment, Empower, Enforcement, Enforcement actions, entertaining, environment, equity, Europe, event, events, evergreen, existing, Existing home sales, experience, experts, fair lending, Fall, Family, Features, fed, FHA, Finance, financial, Financial Wize, FinancialWize, Fintech, first, First-time Homebuyers, flipping, FOMC, Free, front, fund, funding, future, future of work, GEM, Gen Z, General, goals, good, Gratitude, great, Grow, growth, GSE, guide, HELOC, HELOCs, home, home equity, home loans, home purchase, Home Sales, Homebuyers, homebuying, homeowners, homes, hours, house, house hunting, household, Housing, housing demand, housing finance, Housing Policy, houston, How To, hunting, ideas, improvements, in, Income, industry, industry experts, inspection, interest, interest rate, interview, inventory, iPhone, job, jobs, labor, Leaders, Learn, lender, lenders, lending, Life, loan, loan officers, Loans, Local, LOS, low, LOWER, M&A, Main, Make, making, manage, market, Market Trends, Marketing, markets, MBA, MBS, Media, MI, millennial, millennials, miller, minneapolis, mobile, Mobile App, money, More, more money, Mortgage, mortgage lenders, mortgage lending, mortgage loan, mortgage market, Mortgage News, Mortgage Products, mortgage professionals, Mortgage Rates, Mortgages, Move, Movers, Moving, moving in, needs, negotiate, new, new home, News, NMLS, non-QM, offer, offers, office, opportunity, or, Other, ownership, pa, pandemic, paper, part 1, payments, percent, pizza, place, PMI, podcast, policies, portfolio, premium, president, pretty, price, Prices, PRIOR, proactive, products, Professionals, program, programs, property, Psychology, Purchase, QC, quality, questions, rate, Rates, reach, read, ready, realtor, Recession, Redlining, Refinance, Regulatory, Relationships, relentless, reminder, report, return, Revenue, Reverse, Review, right, room, s&p, sales, san francisco, searching, second, secrets, security, Sell, september, Servicing, shares, single, social, Social Media, Software, space, Spending, spending too much, spreads, states, Strategies, Stratmor Group, suite, target, texas, the fed, time, trade-in, Transaction, trends, trust, Underwriting, unique, update, upgrades, US, USDA, UWM, VA, value, versus, Video, virtual, volatility, Webinar, white, will, work

Apache is functioning normally

September 22, 2023 by Brett Tams
Apache is functioning normally

If you decide to file for bankruptcy, you must next decide which type of bankruptcy is right for you. Most individuals have three options, and understanding Chapter 11 vs. Chapter 13 vs. Chapter 7 is important in making the right decision. 

Bankruptcy can be complex, and even a small mistake in how you file can substantially change the outcome of your case. It’s typically a good idea to consult an experienced bankruptcy lawyer before you file a bankruptcy petition. However, we’ve provided some basic answers below to the question, “What is the difference between Chapter 7, 11, and 13 when it comes to bankruptcy?”

In This Piece

Understand the Types of Bankruptcy

Bankruptcy is a way to reorganize your debts or get your debts dismissed because you’re insolvent. “Insolvent” is simply a financial state where you can’t pay your bills—usually because your debts outpace your income. 

People can end up in this situation for a number of reasons. It may be that you lost your job or had reduced income—job losses due to the COVID-19 pandemic are just one example of when this can happen. In other cases, people have unplanned expenses such as medical bills that can put them over the edge financially. Bankruptcy does have some benefits, such as potentially putting a stop to wage garnishments or foreclosures. 

Regardless of how you ended up in this position, it’s important not to jump immediately to bankruptcy. Consider all of your options and speak with an experienced bankruptcy attorney to understand whether bankruptcy will help you.

How Do You Know Which Bankruptcy Type is Right for You?

This is a complex personal or business finance question. Consider talking to an attorney to understand your financial and legal situation. An experienced attorney can quickly apply means tests and other information to your case to help you understand what your options are.

What Is Chapter 11 Bankruptcy?

According to the United States Courts, individuals and business entities can enter into Chapter 11 bankruptcy. Typically, this type of bankruptcy is a reorganization of a business. Through the bankruptcy, the debtor restructures and then creates and implements a plan to pay back creditors.

The plan must be approved by a Trustee appointed by the court. The Trustee is typically in charge of implementing and overseeing the plan, ensuring that the business has the income and resources to follow through with it. Once the plan is completed and confirmed, any remaining debts under the bankruptcy are discharged.

This is an extremely simple summary of how a Chapter 11 bankruptcy works. In reality, they can take years and involve numerous legal proceedings on behalf of the person or business filing as well as the Trustee and creditors. 

What Is Chapter 7 Bankruptcy?

The main difference when it comes to Chapter 7 vs. Chapter 11 bankruptcy is that Chapter 7 is a liquidation plan. That means there’s no repayment plan associated with a Chapter 7 bankruptcy.

When you file Chapter 7, you typically agree to liquidate your assets to pay off as much of your debt as you can. The remaining debts that are part of your bankruptcy are dismissed. 

Whether or not you can file for this type of bankruptcy is determined by income. If your income is below the median for the state you’re filing in, you can probably choose Chapter 7 bankruptcy. If your income is above the state minimum, you must pass a “means test.” A bankruptcy attorney can quickly apply these tests to help you understand whether you meet eligibility for Chapter 7. 

You don’t have to give up everything you own in a Chapter 7 bankruptcy, though. You may be able to keep exempt assets, which can include certain personal belongings. You may also be able to keep your home, a car, and other items, even if you owe money on them, if you can continue to make timely payments on those debts. 

Again, bankruptcy is a complex process and what you can keep and how your proceeding goes is based on a variety of factors. Consult an experienced bankruptcy attorney to find out more about your individual situation.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy may sound similar to Chapter 11 because these both involve repayment plans. But when it comes to Chapter 11 vs. Chapter 13, the biggest difference is that Chapter 13 allows someone with regular income to make an adjustment to how they pay back some debts.

Chapter 13 may be an option for individuals who fail the means test for Chapter 7. Typically, Chapter 13 bankruptcy works for people who have stable income to make some payments on debts but they don’t have enough income to pay all the debts as currently structured.

The individual submits a repayment plan to the court. This plan must be approved by a bankruptcy court Trustee. The Trustee is also typically tasked with making payments under the plan, so the individual pays the Trustee. The Trustee’s office then pays various creditors.

Usually during a Chapter 13 you only pay off part of your debts. Priority and secured debts, such as taxes or auto loans, are paid in full. But unsecured, nonpriority debts, such as medical bills and credit card debt, are only partially paid. If you work through your Chapter 13 repayment plan successfully, the remaining debts are dismissed at the end of the repayment plan. That can take three to five years. 

Should You File for Bankruptcy?

Only you can decide if bankruptcy is the right choice for you. In most cases, you should consider all your other options and ensure there really is no way to feasibly pay your debts as you agreed. Consider the factors below to determine which type of bankruptcy might be right for you. Then, talk to an attorney to find out more about each option.

Should You File for Chapter 7 Bankruptcy?

  • What is your income? Not everyone qualifies for Chapter 7 bankruptcy. You have to pass what’s called a “means” test, and you usually don’t pass it if you make more than the median income of same-size households in your state. 
  • Have you filed for bankruptcy before? If it hasn’t been long enough since the last time, you may not be able to file.
  • What type of debt are you dealing with? Most, but not all, debt can be discharged in a Chapter 7 bankruptcy. If you’re trying to deal with debt that isn’t dischargeable, it may not be worth filing Chapter 7.
  • Do you want to keep your property? Some property may be exempt, such as your home or a car you need, but you may not be able to keep the same property in a Chapter 7 that you could keep in a Chapter 13, for example. Definitely talk to your bankruptcy lawyer about which property you want to keep and whether it’s possible.

Should You File for Chapter 13 Bankruptcy?

You’ll need to ask all the same questions you’d ask when considering Chapter 7 bankruptcy to find out if Chapter 13 is right for you. You also need to consider whether you have enough income to make some repayment toward your debt. In a Chapter 13 bankruptcy, you restructure your debts and pay some of them over 3 to 5 years before the rest are discharged.

You should also ask yourself if you have the discipline to make the monthly payments to the trustee and follow other rules set by the court. You typically can’t apply for most types of credit, including a mortgage, auto loan or significant personal loan, without getting the court’s approval if you’re in the middle of a Chapter 13 bankruptcy, for example.

Should You File for Chapter 11 Bankruptcy?

Do you have your own business and need to include business debts in your bankruptcy? You might want to consider a Chapter 11 over a Chapter 13. Chapter 11 may also be an option for individuals or couples who have too much debt to qualify for a Chapter 13. Otherwise, all the other questions above apply here, too.

The Main Differences Between the Types of Bankruptcy

To better understand the main differences between Chapter 7, 11, and 13 bankruptcy, consider the table below.

Chapter 7 Chapter 13 Chapter 11
Type of bankruptcy Liquidation Reorganization Reorganization
Income requirements Yes — can’t make above the median for same-size households within the state Yes — must have enough income to make the repayment plan viable Yes — must have enough income to make the repayment plan viable
Can individuals file? Yes Yes Yes
Can businesses file? No Only sole proprietors Yes
How long does it take? A few months 3 to 5 years 1.5 to 5 years
Debt limitations n/a Combined secured and unsecured debts must be less than $2,750,000 n/a

Who Can File for Each Type of Bankruptcy?

In addition to income and debt requirements, each type of bankruptcy has limitations on which individuals or entities can file. 

Chapter 7 Chapter 13 Chapter 11
– Individuals
– Married couples
– Individuals
– Married couples
– Sole proprietors
– Individuals
– Married couples
– Sole proprietors
– LLCs
– Partnerships
– Corporations

What Happens After You File for Bankruptcy

The first thing that happens when you file for bankruptcy is that the automatic stay goes into place. This is a protection that requires creditors to cease all collection efforts until the bankruptcy process can be completed. It’s a powerful protection. For example, even if you’re in the middle of a home foreclosure, the automatic stay can stop that process so you can work through bankruptcy to keep your home.

Once the petition is filed with the court, hearings are set and all creditors included in the bankruptcy are notified. They do have the option of responding to the bankruptcy if desired. You’ll also need to attend the first hearing in your case to testify, under oath, to the truth of everything documented in your petition.

If you’re filing a Chapter 11 or Chapter 13 bankruptcy, you’ll need to file a repayment plan, get approval for it and follow through on it. Once the bankruptcy process is completed successfully, your remaining debts can be discharged. 

How Does Bankruptcy Impact Your Credit?

Any type of bankruptcy can impact your credit. It’s a negative item that stays on your credit report and drop your credit score for up to 10 years, depending on which type of bankruptcy you file.

But the truth is that by the time most people get to bankruptcy, they’ve already missed numerous payments and may be in collections with one or more accounts. If this is the case, bankruptcy doesn’t usually drive your credit score much lower than it already is. And there’s a chance that you may see your credit score begin to climb again after bankruptcy as you make timely payments on debts and are better able to manage your finances.

Chapter 11, Chapter 7, or Chapter 13—these are all huge financial and legal decisions. Each comes with its own pros and cons, and it’s important to handle a bankruptcy correctly if you do decide this is the way you want to go. So, talk to a lawyer and get the information you need to make the best decision in your case.

  • Chapter 7 is removed 10 years after the date the petition was filed.
  • Chapter 13 is removed 7 years after the date the petition was filed.
  • Chapter 11 is removed 10 years after the date the petition was filed.

Want to keep an eye on your credit report to understand when negative items fall off it as you’re working to rebuild? Consider signing up for ExtraCredit.

Options Other Than Bankruptcy

Before considering bankruptcy, research other options to help manage your debt. You might find other avenues that are less complex and not as impactful to your credit reports. They can include:

  • Debt consolidation that reduces how many bills you deal with each month and may create a monthly payment situation that works better for your budget
  • Debt counseling that brings in professionals who can help you negotiate with your creditors for better terms and manage your money better to make ends meet
  • Selling property so you can pay off debts that are beyond your current budget
  • Increasing your income with a second job or side hustles so you have more money to pay your debts

Ultimately, whether bankruptcy is right for you is a decision you must make yourself. Start with the information above to gain a brief understanding of your options, and reach out to an attorney to help you understand how these details might apply to your case.

The Impact of COVID-19 on Bankruptcies

Bankruptcies are still proceeding in the wake of the coronavirus pandemic. You may find that hearings related to cases are being handled via phone or web conferencing and not in person.

If you’re making payments on a Chapter 11 or Chapter 13 case and have been impacted financially by the pandemic, you should contact your attorney as soon as possible. They can help you understand the best next steps, which might include filing motions in your case to alter your payments temporarily.

The CARES Act also provides some modifications to how certain elements of bankruptcies are handled. It ensures federal stimulus payments aren’t considered disposable income, for example, and provides Chapter 13 debtors a path to seek modified payment plans if their income is impacted. 

Source: credit.com

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Apache is functioning normally

September 20, 2023 by Brett Tams
Apache is functioning normally

Here’s how this social worker has paid off $28,000 of student loan debt in 15 months.

Today, I have a great debt payoff progress story to share from Taylor. Taylor is a social worker who is working on paying off $277,000 of debt and retiring early. She shares tips on how she is cutting her expenses, the ways they’ve increased their income through various side hustles, house hacking advice, and how she qualified for an $88,000 student loan award. Enjoy!

Now, don’t let the title deceive you into thinking we are debt free; we most certainly are not. 

As of this writing, we still have $251,195.39 of debt (all student loans).

This is our story about the debt payoff strategies we used in paying off $28,026.02 of debt and our goals for the future!

Who are we?

My name is Taylor, and I am a 29-year-old medical social worker who finished grad school in 2018. I am also a part-time social media coordinator and with both jobs combined, I make $96,000 (gross). 

I live with my husband, Bret, who I have been with for 11 years and married for 3. He is a full-time student and has been in grad school since September 2020 (he has about 2 more years left). We love to travel, try new restaurants, hang out with our friends and family, and just have a good time. 

I also have a blog at Social Work to Wealth.

Related articles:

How did we get here? 

First, I need to give you some background before we get into the nitty gritty of our debt numbers and payoff strategies. 

2012: We met when both of us were in college. I was 18 and Bret was 22. Soon after we met, Bret took a few years off from school while I finished my bachelor’s. I relied entirely on student loans, and don’t remember applying to any scholarships. When Bret returned to school to finish his bachelor’s, he did receive some scholarships and worked a summer job to pay forhousing but still needed to rely on student loans to pay the bulk of his tuition. 

I will speak for myself when I say I didn’t take the time to calculate how much loan money I actually needed and blindly accepted the total amount. Looking back, maybe I would have needed it all or maybe not, but I wish I would have at least done the exercise. 

We have always been open with talking about our debt and money in general, but I remember us both expressing the thought that we would probably always have our student loans. We would just live our life, pay our minimum payments, and that would be that. There was never any talk about debt payoff strategies, or any money management strategies, really. 

We went through many life transitions. Living apart for two years while I went to grad school, him returning to school to finish his bachelor’s, various jobs, and a post-bach program.

2019: Bret was finishing up his post-bach program and got accepted into grad school. We were newly engaged and began planning and saving for our wedding scheduled for July 11th, 2020. Such exciting stuff!

March 2020: We got the news our wedding venue was closing for the foreseeable future due to the COVID-19 pandemic, and we decide to cancel our wedding. We switched gears and used the money we saved for a down payment on a new home. Then, we had a small intimate wedding featuring a hot-air balloon with 18 of our closest family members! We personally saved a ton and also had tremendous help from our family. 

September 2020: I start a new job and Bret starts grad school. We are newlyweds and settling into our new home in a new city.

I wish I could talk more about 2020 because it was a HUGE year for us with buying a home, moving, getting married, Bret starting grad school and me starting a new job, but that’s a conversation for another day!

Our wedding

From frugal to spenders

When we were saving for our wedding, we were very frugal. Any extra money we had, we put toward our wedding savings (which again, ended up being used for the down payment on our house and a smaller wedding ceremony). 

We went from frugal to swiping our cards left and right to prepare for our wedding and furnish our house. It was sooo nice to finally be able to spend the money we had been saving for so long! But this continued into 2020… and 2021…

We were mostly spending on eating out and experiences. We do like to buy “things” but we definitely value food and experiences a lot more. We even decided to put a trip to Hawaii on our credit card costing us around $5,000, along with other expenses, because why not? We deserved it!

We didn’t have much of a budget, our bills were getting paid, but the credit card bill kept increasing. Since I was the only one bringing in income, we took out some student loans to help with a portion of our living expenses. And the credit card bill continued to increase. 

The “wake-up call”

The “wake-up call” is such a theme throughout many debt payoff stories. So, here’s mine. 

I went to breakfast with two friends in December 2021, and one of them brought up high-yield savings accounts (HYSA). I had never heard of this type of account before and was shocked to learn that these savings accounts had a way better interest rate than a regular savings account. 

How was I just hearing about this at 28 years old? My mind was blown!

I thought, what else don’t I know? So of course, that led me to deep dive into the world of personal finance. I consumed any book, video, blog, or podcast I could get my hands on. I read stories after stories of people paying off thousands of dollars’ worth of debt, leveraging credit card points for free travel, investing, and so much more!

It was so motivating. I was hooked! (And still am.)

Bret was open and willing for me to share with him what I was learning. We started realizing that for the last year and a half, we hadn’t been telling ourselves “No”. We had just been buying whatever we wanted, and we had the credit card bill and no savings to show for it. 

We learned that we could pay off all our debt and it didn’t have to stay with us forever. We learned there was a way to use a credit card responsibly (we thought we were). We learned that we could even retire early. That one sounded real nice! We dreamed of having more time doing our hobbies, traveling and being with our friends and family. And if we ever had kids, we dreamed of being able to work part-time so we could be home more with them and available for school activities. 

Knowing this, we started reining in our spending, trying to just be more “mindful”, but no major change was made. 

We take on more debt

April 2022: People in our neighborhood were getting new fences. We started thinking, “Hey, we need a new fence, too…” In some areas it was broken, it hadn’t been stained so was rotting, and was 15 years old. We were also going to get an updated appraisal to see if we could get our primary mortgage insurance (PMI) removed after just two years of owning our home and thought a new fence might help. 

A coworker told me she was using a home equity loan to buy a fence and to do some other home renovations. We investigated options and ended up opening a $20,000 home equity line of credit (HELOC) instead with about a 4% interest rate. We buy our fence which ends up being about ~10,000 and we were set on it…

The second “wake-up call” 

When it was all said and done, we loved our fence. We still love our fence, it’s beautiful! (And it better be at that price!) We stained it and we believe it will last us for many years.

But we start talking again about our debt and how we probably didn’t need this fence right now. We know we didn’t need this fence right now. Our PMI was removed, and it could have maybe happened even without the fence. Who knows. 

We began thinking we need to make some serious changes in the way we manage our money. We need to do more than just be “mindful” about our spending. We make a real plan. We plan to make an actual budget, stop taking on unnecessary debt, and take a break from using our credit cards for the foreseeable future. 

May 2022: Beginning of our debt payoff journey 

Since we were serious about our new money management changes, I documented how much debt we had so we could track our progress.

$277,721.41

Here was the breakdown:

  • $260,390.25 in student loans, Bret & I’s combined – various interest rates
  • $10,676.24 HELOC – 4% interest rate
  • $5,430.76 is from credit card spending – 4% interest rate*
  • $449 for furniture – 0% interest rate
  • $775.16 for Peloton bike – 0% interest rate

*We moved our credit card debt to our HELOC since our credit card was around a 25% interest rate.

July 2023: Current debt numbers

Our current debt balance is $251,195.39, * which are all student loans. 

We have paid off a total of $28,026.02 of debt! 

*Our current balance will increase to ~$255,000 once Bret gets his final student loan disbursement (more on that later). 

I want to also mention that we do have our mortgage, but we aren’t trying to pay that down as quickly as possible for a few reasons: we have a 3% interest rate, we don’t plan on this being our forever home, and one day we might rent it out or sell it.

Actions that helped us pay off $28,026.02 of debt in 15 months

We found a budgeting method that worked for us

We realized we could live off my income alone and not take on anymore debt, but we would have to have a somewhat rigid budget.

Finding a budgeting method that worked for us took some time. I don’t know how many times over the years I have tried to track my expenses in a budget app or an excel sheet, only to find out it was too overwhelming and that I was still overspending! 

I am a visual person and learned about the envelope budgeting method, so we decided to give that a try, but use a digital variation. 

So, for our entire money management system we have 4 checking accounts and 2 savings accounts (short-term and emergency fund). Our checking accounts include bills, food and miscellaneous, and two personal spending accounts. 

This may seem like a lot of accounts to some, but it has worked tremendously for us. I love having a separate account for each major category in our budget so I can easily see how much money we have left in a certain category without having to add every expense into an app or Excel spreadsheet. We are joint owners on all of these accounts. 

We then use the zero-based budget method to determine how much goes into each account. 

We do have multiple cards to manage, but the pros VERY MUCH outweigh the cons here. 

And with our own spending accounts, we have a certain amount of money allotted to us each month, so we individually have some spending freedom. We don’t have to feel guilty and know this money is set aside specifically for our personal spending.

Cut expenses and increased our income 

I know some people are tired of hearing about this recommendation, but it’s something that really did help us! We reined in our spending a bit but mostly we had to increase our income. At a certain point, there wasn’t much more to cut. 

We didn’t have many streaming services, started to limit our eating out, we didn’t have car payments, and we meal planned and prepped. We did (and still do) aaalll the things. We had to increase our income somehow. 

Ways we increased our income

My income increase

I continued with my second job as a social media manager and then started dog sitting.

I have been dog sitting for about 5 years and have primarily used the Rover platform to list myself as a dog sitter. I like this app because it’s easy to use and I can specify various services to offer (e.g., house sitting, boarding, drop in visits, day care, or dog walking).

It also allows me to mark which days I am available and then people reach out to me if I seem like a good fit and my availability matches with their needs! Setting up my profile took some time, but now that it’s done, everything else is fairly low maintenance.

I now just have to respond to inquiries in a timely manner and set up a meet and greet if it seems like a good fit.   

I currently only offer house sitting and on Rover and I charge $65/night. Rover takes a cut, so I end up pocketing $52. I also have private clients who pay me directly, and I have gotten those by referrals from past Rover clients. I charge my private clients $40/night. 

I recently increased my rates on Rover and have been slow to increase my price with my private clients because they’re loyal.

I don’t make a ton of money dog sitting, but I am able to make a couple hundred dollars a month. My schedule is very limited, but there are people with better availability who make significantly more than I do!

I love animals and we don’t have any due to our sporadic work schedules, so it’s a great way for me to spend time with pets and get paid, too!

Bret’s income increase

Last year, Bret decided to take a break from grad school and soon after, he was offered a summer job in Alaska.

When we first started dating, he used to spend almost every summer there working for a family who owned a set-netting fishery. His uncle had spent many summers in Alaska working for this family and one summer brought Bret to work with him. They would catch salmon and sell it to a buying station in their area. 

He went up there for about 6 summers in a row, until he got too busy with school and couldn’t go anymore. 

He hadn’t been to Alaska in over 5 years, but someone who worked for the buying station remembered Bret, called him, and asked if he’d be interested in working at the buying station! Since he was already on a break from school, he said yes and worked up there for 8 weeks.

We were able to put every paycheck he earned towards our debt because we could manage all our expenses on my income alone. It was also a great way for Bret to spend part of his summer and I was finally able to visit as I never gotten the chance in previous years.

House hacking

We also started house hacking! We had a spare bedroom and bathroom I would use for my office and occasionally, for guests. A friend of mine and her husband are really into the real estate space and gave us the idea to rent it out. 

We weren’t comfortable with the idea of having a long-term roommate, and with both of us working in healthcare, we knew there was a need for short-term and furnished housing for travelling healthcare professionals. 

For us, short-term meant renting for 1-6 months, but we were open to individuals staying longer if it worked well for everyone involved!

Some questions we had to address before renting:

  • Did we need a permit?
  • How much should we charge for the deposit, rent and pets?
  • What furniture and amenities are important for travelers?
  • Where should we list the room?
  • How to create a lease agreement?

In our county, we did not need a permit to rent out the room if we were renting for at least 30+ days at a time. 

After researching rental prices in our area, I found rooms that were of similar caliber listed for $1,100 per month or more. We wanted to be competitive and so we initially settled on $900 per month and have steadily increased it. We have now landed on $995 per month which includes all utilities and internet. 

We set the deposit at $995, with an additional $300 for a pet deposit, and no ongoing pet rent.

We wanted to upgrade the furniture in the room and IKEA was a great place for us to find affordable, durable, and aesthetically pleasing furniture. We made sure the room had a bed, large dresser, bedside table, and we kept my desk in there too.

I read it’s important for travelers to have their own TV available so they can unwind in their room. We were able to find a decently priced smart TV off Facebook Marketplace. 

Furnished Finder is where we decided to list our room, which started out as a platform for traveling nurses to find furnished housing. It is now used heavily by many healthcare professionals, students, and professionals in other fields.

Travelers reach out to us through the Furnished Finder website and if the dates work out, we move forward with scheduling a video interview. It’s important for us to be able to talk to the person, even if it’s just over video, and we want them to see our faces and home in real time as well.

For the lease agreement, we used ez Landlord Forms, because they have leases for each state with specific information on what’s required to include. 

We don’t ask for anything major from tenants. The most important things to us are that they are respectful of our space, don’t smoke in the house, and pay their rent on time. We also added a page at the end for tenants to add two emergency contacts in case we need to call someone on their behalf.

We have had 4 renters so far with the room being occupied for 13 out of the last 14 months. It has really helped us with our debt payoff goals and we have also met some awesome people through the process! We plan to continue renting it out for the foreseeable future. 

Applied for in-state student loan help

My state offered a program called the Oregon Behavioral Health Loan Repayment Program where they help minorities in the behavioral health field, or those who serve them, pay back their student loans. 

This program is funded by The Behavioral Health Workforce Initiative which has the goal of recruiting and retaining behavioral health providers who, “Are people of color, tribal members, or residents of rural areas of Oregon, and can provide culturally responsive care for diverse communities.”

To apply, I had to show I was employed and actively providing behavioral health services and give them detailed documentation about my student loans. I also had to answer two essay questions related to being a part of and/or working with communities who are underserved and how my training has equipped me with supporting these communities.

I applied last year and was a recipient of an award!

As a recipient, there is a two-year service commitment which means I have to continue providing some sort of behavioral health service during that time frame (which I planned to). Over the next two years, I will be getting ~$88,000 in quarterly disbursements to put towards my student loans. So far this year, I have received ~$11,000, and it’s been life changing to say the least!

Alongside this support, I am also pursuing Public Service Loan Forgiveness (PSLF) for additional student loan relief.

Managing our mental health while paying off debt

Since I am a social worker, I often think about how money and debt affect individuals’ mental health. It’s one of the reasons why I started my blog in the first place. 

I realized managing money is a universal task and many of us don’t know what we are doing because talking about money is taboo. And when you have financial stress, it can really take a toll on your mental health. So, I wanted to share our journey in hopes of helping others. 

Bret and I aren’t those individuals who want to avoid eating out and fun experiences until we are debt free. And, we are also privileged to not have to take those extreme measures either. It has been important for us to make this journey sustainable and not deprive ourselves of experiences while we are going through it.

Here’s how we are making our journey sustainable: 

  • Still going out to eat
  • Budgeting for personal spending money, aka fun
  • Setting realistic debt payoff goals 
  • Putting aside money for travel
  • Not comparing and thinking other people are better than us because they’re able to pay off their debt quicker 
  • Tracking our debt payoff progress (we use Excel). With so much debt left to pay off, being able to see our progress is really motivating
  • Openly talking about our debt. Avoidance is a coping mechanism for many, for us, acknowledging and addressing it has been so freeing (but it wasn’t always this way). 
  • Talking about our dreams and reminding ourselves why we want to do this in the first place

We know that if we eliminated going out to eat, budgeting for fun, or both, we could be paying off our debt much quicker. However, that sounds miserable to us. It’s worth it to still go out to dinner, travel, or buy plants (in my case) than to deprive ourselves of the joy these things bring. 

We are making great progress and we know in time, we will be debt free.

Our debt payoff journey is not linear

A few months ago, we decided to take out $6,000 of student loans. Bret currently has a full tuition scholarship, so we are tremendously lucky in that regard, but he just learned about some conferences that would be really helpful to his professional growth. We have gotten $1,500 of this loan money already which is included in our current debt balance, but we haven’t received all of it yet.

We could have pinched and saved to avoid taking on any of this debt, but that would have caused me to work more than I currently am. Again, not in line with our current goal of making this journey sustainable! 

We were very intentional about how much to take out. We estimated how much he would need for a few conferences and declined the rest. We even opened a separate savings account for the money to make sure it didn’t get accidentally spent on anything. 

I’m SO proud of us for that!

The goal here is progress not perfection. So cliche, I know. But we are learning how to think critically about our money, spend thoughtfully, use our money as a tool to reach our goals, and enjoy our life along the way. And right now, that meant taking on a little more debt. 

We are moving in the right direction, and we know when he starts working, that will really accelerate our debt payoff journey since we have proven to ourselves we can live on my income alone. 

Our plan going forward

Bret is still in school which means his loans are on deferment, so we currently have his on the back burner. 

With the loan payment assistance I am receiving, it’s allowing us to put any extra money we have each month towards our savings. Our priority right now is building up a good emergency fund of about $16,000 (~4 months’ worth of expenses). 

This has been difficult because of inflation and just little emergencies that keep popping up, but we are slowly making progress. 

I am also prioritizing investing in my employer retirement plan, but only up to the amount that gets me my employer match which is 6% of my income.  

Bret will be graduating in 2025, so at that time, we will pivot to incorporating his loans into our budget. Our goal is to be debt free by 2028. 

It will take a lot of discipline and persistence, but I think we can do it. I am manifesting it!

We want to continue to learn, implement, and grow. We want to keep having transparent discussions about money and building our money foundations. And I personally want to continue sharing our journey with hopes of inspiring, encouraging and educating others. Here’s to sharing the wealth. 

Do you have debt? What are you doing to pay it off?

Taylor is a social worker and personal finance blogger at Social Work to Wealth where she shares tips, resources, and lessons learned on her family’s journey to paying off $277,000 of debt and retiring early. She hopes to inspire and empower social workers with financial education so they can have a better relationship with their money. When she’s not working or blogging, you can find her traveling, gardening, trying a new restaurant, or buying too many plants.

Source: makingsenseofcents.com

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Apache is functioning normally

September 20, 2023 by Brett Tams
Apache is functioning normally

According to the latest report by IMARC Group, titled “Japan Home Decor Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2023-2028,” provides an extensive analysis of the industry, including Japan home decor market size, share, trends, and growth opportunities. The report also covers competitor and regional analysis and the latest advancements in the market. The Japan home decor market is projected to exhibit a growth rate (CAGR) of 4% during 2023-2028.

Japan Home Decor Market Overview:

Home decor encompasses the art of enhancing the interior of a living space to create a visually pleasing and functional environment. It involves many elements, including furniture, color schemes, lighting, textiles, and decorative accessories. It reflects personal style, culture, and lifestyle preferences, transforming a house into a welcoming and comfortable home. It allows individuals to express their creativity and individuality while influencing the atmosphere and mood of each room. Whether minimalist and modern, cozy and rustic, or eclectic and vibrant, home decor plays a pivotal role in shaping the ambiance and character of living spaces, making them uniquely tailored to the needs and tastes of the inhabitants.

Get Sample Copy of Report at – https://www.imarcgroup.com/japan-home-decor-market/requestsample

Japan Home Decor Market Growth:

The market in Japan is majorly driven by the increasing importance of aesthetics and personalization in interior design. In line with this, the rising desire to create comfortable and stylish homes has become a significant driver of market growth. Furthermore, the rise of e-commerce and online interior design platforms has made home decor more accessible, allowing consumers to explore a vast range of options and styles conveniently. Besides, the changing lifestyles, such as remote work and the desire for versatile living spaces, have spurred demand for functional and adaptable home decor solutions. Moreover, sustainability is gaining prominence in the home decor industry, with eco-friendly and ethically sourced products becoming more appealing to environmentally conscious consumers. Additionally, the COVID-19 pandemic increased time spent at home, prompting many individuals to reevaluate and upgrade their living spaces, further boosting the market.

Explore the Full Report with Charts, Table of Contents, and List of Figures: https://www.imarcgroup.com/japan-home-decor-market

Key Market Segmentation:

Product Type Insights:

  • Home Furniture
  • Home Textiles
  • Flooring
  • Wall Decor
  • Lighting
  • Others

Distribution Channel Insights:

  • Home Decor Stores
  • Supermarkets and Hypermarkets
  • Online Store
  • Gift Shops
  • Others

Breakup by Region:

  • Kanto Region
  • Kinki Region
  • Central/ Chubu Region
  • Kyushu-Okinawa Region
  • Tohoku Region
  • Chugoku Region
  • Hokkaido Region
  • Shikoku Region

Competitive Landscape:

The report also examines the competitive landscape within the market and offers comprehensive profiles of major key players.

Key Highlights of the Report:

  • Market Performance
  • Market Outlook
  • Porter’s Five Forces Analysis
  • Market Drivers and Success Factors
  • SWOT Analysis
  • Value Chain
  • Comprehensive Mapping of the Competitive Landscape

Note: If you need specific information that is not currently within the scope of the report, we can provide it to you as a part of the customization.

About Us:

IMARC Group is a leading market research company that offers management strategy and market research worldwide. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses.

IMARC’s information products include major market, scientific, economic and technological developments for business leaders in pharmaceutical, industrial, and high technology organizations. Market forecasts and industry analysis for biotechnology, advanced materials, pharmaceuticals, food and beverage, travel and tourism, nanotechnology and novel processing methods are at the top of the company’s expertise.

Contact Us:
IMARC Group
134 N 4th St. Brooklyn, NY 11249, USA
Email: [email protected]
Tel No:(D) +91 120 433 0800
Americas:- +1 631 791 1145 | Africa and Europe :- +44-702-409-7331 | Asia: +91-120-433-0800, +91-120-433-0800

The post Japan Home Decor Market Size, Share, Price, Current Trends, Growth Factors, Analysis & Forecast Report [2023-2028] appeared first on Super Market Research.

COMTEX_440427738/2607/2023-09-18T05:48:36

Source: benzinga.com

Posted in: Bank Accounts Tagged: 2, 2023, About, accessories, Advanced, All, analysis, art, at home, brooklyn, business, charts, color, company, Consumers, covid, COVID-19, COVID-19 pandemic, cozy, creativity, Decor, design, Drivers, eco, eco-friendly, environment, Europe, Financial Wize, FinancialWize, first, food, Food and Beverage, Forecast, Forecasts, friendly, furniture, growth, home, Home Decor, homes, house, in, industrial, industry, Insights, interior design, Leaders, Lifestyle, lighting, list, Living, making, market, Minimalist, modern, More, needs, ny, offers, opportunity, or, pandemic, partner, Personal, Personal Style, platforms, price, products, rate, remote work, report, Research, rise, rising, room, sales, space, Style, sustainability, Technology, textiles, time, Travel, trends, upgrade, US, value, work

Apache is functioning normally

September 19, 2023 by Brett Tams
Apache is functioning normally

For example, bank regulators in July released a plan to increase capital requirements for residential mortgages, the Basel III Endgame rules. Redwood executives are positioning the company to acquire mortgage loans in the market, mainly jumbos, with the expectation that banks will have a reduced appetite. 

Abate doesn’t think “banks are going to necessarily exit the mortgage market,” but they will “be heavily disincentivized from growing mortgage portfolios.” Ultimately, “the real shift is going to be all those jumbos that were going to banks will come back out, hopefully to non-banks like us.”

Another opportunity is in the home equity space. Redwood launched in September its in-house home equity investment (HEI) origination platform called Aspire. Through Aspire, Redwood plans to directly originate HEIs by leveraging the company’s nationwide correspondent network of loan officers and establishing direct-to-consumer origination channels, the company said. 

“The interesting thing about HEIs is instead of a homeowner taking out equity in the form of cash and paying a mortgage on it, there is no monthly payment within HEI,” Abate said. “The way the investor gets paid is that you share in the upside of the home.” 

Abate explained the impacts of the Basel III Endgame rules on the market, the rationale behind the home equity investment product, and more about Redwood strategies in an interview with HousingWire from a company’s office in New York last week. 

This interview has been condensed and edited for clarity.

Flávia Nunes: How has Redwood strategically positioned itself in the residential mortgage space amid all of these potential regulatory changes?

Christopher Abate: Redwood is almost a 30-year-old company. The company was originally built to serve banks and others with the thought that there was no private sector [to invest in mortgage assets], only Fannie Mae and Freddie Mac. We would partner with banks to buy their loans and securitize them so the banks could recycle their capital. We don’t originate residential mortgages. We don’t service them. We’re very similar to the GSEs. We modeled the business to serve that role in the private sector. The mortgage market has changed over the decades. We’ve seen a few cycles. We’ve got the Great Financial Crisis, the Covid-19 pandemic, and now we’ve had a lot of interest rate volatility. Along the way, there have been many regulatory changes that have impacted the market; the CFPB has been created, and there’s the Dodd-Frank Act. Then there are the Basel rules, the regulatory capital rules for banks. And that’s what’s really in play today. 

We’ve positioned the company, from a strategic perspective, with the thought that banks will be heavily disincentivized from growing mortgage portfolios as an earning asset class. The banks are not going to necessarily exit the mortgage market because the mortgage asset is the biggest that a client takes out, and you want to be there for all the cross-selling in all the other consumer products. Banks will always serve their best clients. But viewing the mortgage portfolio as an investment class, that’s where the posture will shift because the capital required to hold against it [residential mortgages] is going to go up. And just based on the rapidly rising rate of deposits, just given where interest rates are at, the net interest income that they earn is getting squeezed. Banks move slowly. This will be an evolutionary shift, not an overnight shift. 

Nunes: As you noted, bank regulators released a plan to increase capital requirements for mortgages through the Basel III Endgame rules. Can we expect changes to what was proposed?

Abate: Yes, it will change. In particular, some of the sliding scale capital charges are based on things like LTV [loan-to-value]; there’s a fair likelihood that that changes because of the way it disproportionately impacts first-time homebuyers and underserved communities. But the rule is not going away. Bank regulators are paid to keep things safe. And the idea that regulators are going to allow banks to continue to do what a First Republic or Silicon Valley Bank did, I don’t see that in the cards. 

We saw significant changes after the Great Financial Crisis, which was more of a credit crisis. We saw banks getting out of risky credit mortgages like option ARMs and some subprime lending happening back then. There will be changes. Banks will not wait for the rule to be finalized to start implementing it. There will be some evolution to the rule itself. But the thrust of the rule is that it’s going to be more expensive for banks to hold mortgages.

Nunes: If banks won’t wait for the Basel III Endgame to be finalized, how are they anticipating the rules?

Abate: A year ago, banks were very happy to hold mortgages, deposit rates were sticky, and the cost of deposits was still very low. Now, all of them are looking for a capital partner, at least an option to have liquidity. The tone has changed dramatically amongst bank executives. Some banks move more slowly than others.

I like to remind people that independent mortgage banks live and die by liquidity. They care about the basis point. Banks don’t operate that close to the ground. Things take longer to develop, but the relationships are also typically stickier. Once you forge a strong partnership with a bank partner, the likelihood of them shopping for that liquidity is much less than an independent mortgage bank that is trying to optimize every dollar.

Nunes: In your recent 2Q 2023 earnings report, you mentioned acquiring three bulk pools of loans from depositories, primarily with seasoned underlying loans at attractive discounts. How is the secondary market now for these trades in terms of volumes and prices?

Abate: I certainly expect RMBS volumes to go up significantly over time. It’s not something that happens overnight. We’ve been active. We just completed a deal in August. I would expect us to continue using securitization. 

Right now, we’re in this hybrid phase where loans that are getting securitized are partially seasoned loans, and some of the loans have gone down in value–the lower coupon mortgages. The banks have been slowly selling some of those, and Wall Street dealers have quite a bit in inventory. We’re still seeing a lot of that aged collateral coming out through securitization. Issuers like Redwood have been combining current coupon mortgages. We saw this last year in the private sector securitization market, where we had all of this aged inventory. It was hard to get investors to focus on the collateral because there was so much sitting in inventory that they could price it wherever they wanted to. The pricing now is probably the best it’s been in a year, maybe two years. So, the market is finally starting to cross back into more current coupon on-the-run production, which is what we’re focused on.

We’ve completed well over 100 residential securitizations, close to 140 If we factor CoreVest. There’s been years we’ve done 12-15 securitizations. There’s been years where we’ve done none or one. So, we very much want to get volume going again to the extent we could be in the market with certainly a deal a quarter, but if not two or three, that would feel the base to me.

Nunes: In terms of products, what the current landscape brings in terms of opportunities? 

Abate: Right now, the biggest opportunity, ironically, is in the regular prime jumbo market because that was the product banks were most focused on. And they weren’t wrong to focus on it from a credit standpoint because when the banks got through the Great Financial Crisis, all the big regulatory shifts were to get them out of taking risky mortgages on the balance sheet. Then, they started taking less risky mortgages, which are jumbos. The real shift is going to be all those jumbos that were going to banks will come back out, hopefully to non-banks like us. 

Nunes: Redwood also launched a home equity platform. What is the strategy here? 

Abate: When you look at prime rates in the high single digits and add a credit spread to that, even for the most well-qualified borrowers, you are looking at a 10% to 12% interest rate on a second mortgage. For a well-qualified borrower, 750 FICO or above, and a low-LTV first mortgage, you might be comfortable paying 10% to 12%. But that’s the best-case scenario. For everybody else, unlocking that equity is even more expensive. We’re seeing that for the traditional second mortgage products, there’s way more investor demand than consumer demand.

We’ve rolled out the traditional products and a newer product called home equity investment [HEI] options. The interesting thing about HEIs is instead of a homeowner taking out equity in the form of cash and paying a mortgage on it, there is no monthly payment within HEI. The way the investor gets paid is that you share in the upside of the home, so the home price appreciation. There are a lot of use cases for HEI over traditional products. If you think about somebody with a lot of student debt or lower FICO, they’re going to qualify for a very expensive second mortgage. So, this is a good option. It doesn’t add to their monthly payment obligation. You can do what you want with the cash, just like with a home equity line of credit, but not having the payment. It’s a bridge until the second mortgage is cheaper.

Nunes: To invest in this product, investors must believe home prices will keep rising, right?

Abate: There are a couple of things investors care about. You have to believe in a HPA [home price appreciation] story. But one way we mitigate that is we strike the price of the home at a discount to its current appraised value. So that, even if the home is sold next week, the investor will make money. If you believe that interest rates are nearing the top, as far as the Fed’s rate hike cycle, HPA should start to realign. If rates are going down, HPAs are going up. Investors are starting to get comfortable with this huge move in rates, hopefully, this fall is gonna pause. 

Then, ultimately, the investors want to understand if we give you $100,000 with this HEI, when do they get their money back? Because it’s a 30-year product. And that’s where we’ve designed the product, which is unique to Redwood, that creates strong incentives for the homeowner to refi.

Nunes: How did you get the property at a discount? 

Abate: The product is for people in their homes that are not moving out. There isn’t an actual transaction on the property. It’s somebody that wants to stay in their home. And if it’s a $1 million home, and we offer you $150,000 HEI, we might strike that HEI at $900,000. Let’s say it’s a $1 million home, and for purposes of coming up with the investor return, we’re going to call it a home at $850,000. Even if they sold the home at a $50,000 loss, the investor would still generate a return, and that’s what gets investor capital into the asset class. But what the homeowner gets is all of the proceeds, the cash and no monthly payments

The investors are institutional investors, well-known institutions, firms, pension funds, and life companies; they’re all just to varying degrees focused on HEI now. And the big reason is that nobody’s been able to tap this massive home equity opportunity. We are going to give it a try. 

Nunes: Residential mortgages are just one facet of the business. What are your plans for commercial real estate, which has had a challenging year?

Abate: What we do here in New York is our business-purpose lending platform. We realized a number of years ago that investors are becoming a much bigger participant in the real estate markets. Serving them and providing bridge loans to investors who want to flip homes or provide turned-out financing for investors who want to rent homes, that’s an entire other residential business that we run under the flag of CoreVest. In residential, we’ve more or less stuck to our knitting of non-agency. We’ve had opportunities to enter the agency space in the past and participated in certain instances, but mostly, what we do is non-agency. 

Nunes: You mentioned banks, but what are the business opportunities with IMBs?

Abate: We’ve had a great long-term relationship with the IMBs. The IMBs have a big opportunity to pick up some [market] share. Since the Great Financial Crisis, most of our business has been with the IMBs. We have a network of between 150 to 200 [partners], predominantly non-banks that we will buy mortgages from. We expect that to rebalance in the next few years. But the IMBs are also a big opportunity to take clients from the banks.

Nunes: And what are the plans for servicing mortgage rights? 

Abate: Servicing will continue to move out of the banks. That’s another big opportunity that we’ll focus on. We don’t plan to operate as a servicer, but we might own servicing rights. What we’ve done typically is when we own servicing rights, we will subservice. We want to hire somebody with a call center. And we’ll pay them a monthly fee. But when you balance out the revenue potential with the servicing asset, with the cost of service, there are still good opportunities. There’s a lot of competition for servicing. For some mortgage REITs, that’s their primary asset class, just not for us.

Nunes: Can you shed some light on your partnership with Oaktree and Riverbend?

Abate: Both of those are related to the business-purpose lender space. Oaktree is a great example of us expanding our capital partnerships into the private credit sector. Redwood is a publicly traded company, and historically, when we needed to raise money, we would do a common stock offering or a public market deal. When rates started going up, things got pretty ugly for the mortgage REIT space and the public markets. We and all other mortgage REITs started trading at discounts. Raising money in that environment hasn’t been overly attractive. So, building partnerships with private credit firms like Oaktree to focus on specific asset classes is a big part of what we want to do. One aspect that’s attractive to us is we can earn asset management fees.

The Oaktree model is something that we want to replicate on the residential side as the jumbo opportunity picks up. We’ve been in discussions with other private credit investors and institutional investors who see the same opportunity as in jumbo and non-QM.  

Nunes: With a reported cash and cash equivalents of $357 million as of June 2023, can we anticipate any M&A activities, especially considering the challenges faced by many lenders in the industry?

Abate: M&A activity has picked up in the space and based on our track record, we are a logical call. Part of our strategy is: to be active in M&A, you have to be active. It’s not efficient to call on at eight, seven different firms. You start with the ones that have shown interest in actually transacting. We have seen some opportunities, and nothing I can share in this interview, but it’s safe to say we’ve been active in M&As and we’ll continue to focus on that as part of our growth strategy.

We haven’t been open to it [acquiring a lender]. For many years, we’ve wanted to keep the business sort of regulator-light. The best way to do that is not to directly face consumers with products. We’re comfortable originating to investors, that’s what CoreWest does. But investors are sophisticated business-run ventures and not homeowners who may or may not be sophisticated in the financial markets. We have tended to not originate, but I think where we’re at as a company is from a strategic standpoint, we’d be much more open to it through M&A.

Nunes: What do you expect for the macro landscape in the coming year?

Abate: There’s such a vast shortage of supply of homes in many parts of the country, which is supporting home prices. The Fed consciously inflated home prices, particularly during the COVID years. These high asset values prevented normal credit losses you might see through a cycle. The combination of QE-fueled asset prices with an economy that hasn’t dropped off too much has created a strong housing market. 

But credit in residential housing should perform immensely better than many facets of the commercial real estate market. There’s so much vacancy in these central business districts. These buildings are valued based on cash flows– not like a residential home, which is an appraisal. If it’s 50% full, it’s worth half as much. From a credit standpoint, certain facets of the commercial real estate sector will have a rough road ahead.

I’m probably supposed to say this, but I feel better about my sector. The technical supporting housing will continue to be strong. The big challenge with residential today is just transaction activity. If you own a home with a 3% mortgage, you don’t want to sell it. If your home suits your needs, the prospect of doubling your monthly payment to move is very unappealing. The real challenge in residential has been a lot of capacity to make loans, but there’s not much demand. If rates do stabilize, that will change quickly. When the market thought in January that rates were stabilizing, we saw a pickup in loan activity, and then they started going up again; we’ll see what happens this fall. 

 Nunes: Do you see a crisis on the commercial side of the market? If so, how could it impact the residential side?

Abate: It’s hard to say. The only real obvious driver for a crisis is what could be a permanent impairment of occupancy in these commercial office buildings. The way that can affect our markets is there’s a trickle-down effect. If the buildings aren’t full, the restaurants aren’t full, the delis aren’t full, the subways are not full, and the hotels aren’t full because people aren’t traveling to see people in the office. That could have an effect on the economy in general, which would impact housing indirectly. As far as the economy goes, the airports seem more full than ever, and hotels seem to be doing fine. Overall, [the problem] is probably mostly office. But if it keeps getting worse, it certainly could have downstream effects.

Source: housingwire.com

Posted in: Mortgage, Refinance Tagged: 2023, 30-year, About, active, Activities, actual, airports, All, Appraisal, appreciation, ARMs, asset, assets, balance, balance sheet, Bank, banks, best, big, borrowers, bridge, building, buildings, Built, business, Buy, Capital, cash, CEO, CFPB, Commercial, Commercial Real Estate, common, common stock, communities, companies, company, Competition, Consumers, correspondent, cost, country, couple, covid, COVID-19, COVID-19 pandemic, Credit, Crisis, Debt, decades, deposit, Deposits, Discounts, Dodd-Frank, dodd-frank act, earning, earnings, earnings report, Economy, efficient, environment, equity, estate, expensive, Fall, Fannie Mae, Fannie Mae and Freddie Mac, fed, Fees, fico, financial, financial crisis, Financial Wize, FinancialWize, financing, first, First-time Homebuyers, Freddie Mac, funds, General, good, great, growth, GSEs, hold, home, home equity, home equity investment, home equity line of credit, Home Price, home price appreciation, home prices, Homebuyers, Homeowner, homeowners, homes, hotels, house, Housing, Housing market, hwmember, IMBs, impact, in, Income, Independent mortgage bank, industry, institutional investors, interest, interest rate, interest rates, interview, inventory, Invest, investment, Investor, investors, january, Jumbo mortgage, lender, lenders, lending, Life, line of credit, liquidity, Live, loan, loan officers, Loans, low, LOWER, M&A, Make, Make Money, market, markets, me, model, money, More, Mortgage, mortgage loans, mortgage market, Mortgage Products, Mortgages, Move, Moving, moving out, needs, new, new york, non-QM, offer, office, office buildings, opportunity, or, Origination, Other, pandemic, partner, Partnerships, payments, pension, plan, plans, play, portfolio, portfolios, potential, pretty, price, Prices, products, property, Raise, rate, rate hike, Rates, Real Estate, Real Estate Investment Trust, real estate market, real estate markets, rebalance, Redwood Trust, Regulatory, Regulatory Compliance, reit, REITs, Relationships, Rent, report, Residential, restaurants, return, Revenue, right, rising, RMBS, safe, second, Secondary, secondary market, sector, Securitization, Sell, selling, september, Servicing, shopping, shortage, Side, Silicon Valley, silicon valley bank, single, space, stock, story, Strategies, student, student debt, Subprime Lending, The Agency, the balance, The Economy, the fed, time, trading, traditional, Transaction, trust, under, unique, US, value, volatility, volume, wall, Wall Street, wants, will, wrong, yahoo finance

Apache is functioning normally

September 19, 2023 by Brett Tams
Apache is functioning normally

The average tax refund in 2021 was $2,827. And while getting a tax refund often means you overpaid to begin with, that hefty chunk of change hitting your bank account can spawn some great feelings. Before you drop all that dough on your next vacation or an impulse buy, consider whether you can do something more responsible with it. For example, did you know you can use your tax refund to build credit?

How to use Your Refund to Build Credit

6 Tips for Using a Tax Refund to Build Credit

Just getting a decent amount of money in your checking account doesn’t mean your credit goes up. And in reality, there aren’t guarantees about your credit score.

However, here are some tools and methods that tend to move credit in a positive direction or help you impact your score in a positive way over time.

Consider using some of your tax refund to pay for an ExtraCredit account. This subscription lets you get access to 28 of your FICO® credit scores and credit reports from all three bureaus, so you know what’s going on with your credit. Once you gain that access, you can also use some of your tax refund to invest in other tools, getting rewards and potential cash back through ExtraCredit. 

For example, if you find your credit score is lackluster and discover that it may be because of inaccurate information on your report, you could invest in credit repair services with a trusted leader in credit repair. If you sign-up through your ExtraCredit Restore It feature, you get an exclusive discount on the credit repair service. Challenging that inaccurate information and getting it corrected could give you a more accurate credit report and possibly improve your score!

2. Get a Secured Credit Card

If you have poor credit and know that everything on your credit report is accurate, you may need to take some other actions to build credit in the future. One option is applying for a secured credit card.

A secured credit card requires you to put a deposit down to secure your line of credit. That’s where your tax refund comes in. Once you use the card and make timely payments for a certain period of time, you may get your security deposit back. You could also get approved for a higher credit limit and/or lower interest rate. And all those timely payments also get reported to the credit bureaus, which can be good for your score. Make sure to choose a card that reports to all of the major credit bureaus.

3. Open a Credit Builder Account

Credit builder accounts are locked savings accounts that work somewhat like loans. The exact way they work varies, but the concept tends to be the same:

  • You secure a “loan” with a deposit. That deposit is put into a locked savings account and held for you.
  • You pay the loan as agreed, typically making monthly payments.
  • The on-time monthly payments are reported to the credit bureaus, and this helps build your credit.
  • Once you pay off the loan, the savings account is unlocked and you get access to that money.

4. Pay Down Your Debt

Dropping some money on your existing debt can also help improve your credit, especially if it’s revolving credit. That’s because your credit utilization rate plays a big role in your credit score.

Credit utilization refers to the amount of your open credit you’re using. So, if you have a credit card with a $2,000 limit and a balance of $1,000, your credit utilization rate is 50%. That’s considered high.

Using your tax refund to pay down one or more high credit card balances brings down your utilization percentage. That might have a positive impact on your credit. 

5. Open a Savings Account

You may already be working on your credit and just worried about making continual progress in the future. In this case, you might want to open a savings account and put the money away to support needs later. You could use the money to ensure you can cover payments on future debts in a timely manner.

6. Pay Any Late Bills 

On the other hand, if you’re running late with bills, you might use your tax refund to catch up. That puts you in a better position to make timely payments going forward, which is important for your credit score.

Other Responsible Ideas for Using Your Tax Refund

Of course, you don’t have to use your tax refund to build credit. Perhaps your credit is already good or excellent. In that case, you might want to consider a different type of responsible action with your refund. Here are a few options.

1. Start an Emergency Fund

Put the money away for a rainy day. An emergency savings fund helps you pay for unexpected expenses, such as medical bills or car repairs. Some people like to save up around six months of expenses to help cover a gap if they lose income or a job, and your tax refund might help you jump start such a savings.

2. Invest in Retirement

You might be able to add to your 401(k) or IRA accounts. Instead of putting your tax return directly into those accounts, use your tax return to cover normal daily expenses. Then, up the percentage of your paycheck that goes into your retirement account. That lets you save more while getting a tax advantage on the savings. And if your employer matches retirement contributions, you could save even more.

3. Donate to a Worthy Cause

If you’re already fairly set financially, you may want to support a charitable cause. You could donate to COVID-19 relief funds, your church, or a favorite nonprofit organization. Get a receipt so you can claim the donation on your taxes next year to help potentially increase next year’s refund!

4. Support Small Businesses

Small businesses took a huge hit during the COVID-19 pandemic. If you’re looking to give back with your tax refund and also spurge on yourself, consider making big purchases with small businesses. 

5. Invest Some Money

If you’ve ever wanted to invest in the stock market or buy some cryptocurrency, your tax refund might make that possible. Just remember to do your research or consult people who know what they’re doing before you drop all your cash into an investment app.

There’s a lot you can do with tax refund money. You can use your tax refund to build credit, get ahead on debt or treat yourself or your family to something. But before you can do that, you need to maximize your return.

Source: credit.com

Posted in: Building Credit, Financial Clarity, Investing, Retirement, Taxes Tagged: 2, 2021, About, action, All, Amount Of Money, app, average, balance, Bank, bank account, before, big, bills, build, build credit, builder, Building Credit, Buy, car, cash, cash back, Checking Account, church, contributions, covid, COVID-19, COVID-19 pandemic, covid-19 relief, Credit, credit builder loans, Credit Bureaus, credit card, credit limit, credit repair, Credit Report, Credit Reports, credit score, credit scores, credit utilization, cryptocurrency, Debt, Debts, deposit, discover, Emergency, Emergency Fund, emergency savings, employer, existing, expenses, ExtraCredit, Family, fico, Financial Wize, FinancialWize, first, fund, funds, future, gap, good, great, How To, ideas, impact, in, Income, interest, interest rate, Invest, Investing, investment, IRA, job, jump, line of credit, loan, Loans, LOWER, Make, making, market, Medical, medical bills, money, More, Move, needs, or, organization, Other, pandemic, paycheck, payments, poor, potential, rate, read, Refund, repair, Repairs, report, Research, retirement, retirement account, return, revolving credit, rewards, running, save, savings, Savings Account, Savings Accounts, score, secured credit card, secured credit cards, security, security deposit, stock, stock market, support small businesses, tax, tax refund, Tax Return, taxes, The Stock Market, time, tips, tools, top-five-post, vacation, work, working
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