Home Loan Modifications Cut Credit Risk, TransUnion Says
News from Businessweek:

Delinquent U.S. homeowners who received a loan modification have a better record of repaying auto and credit-card debt than troubled borrowers who received no mortgage help, TransUnion Corp. (TRUN) (TRUN) said.

Homeowners whose payments were reduced had a 6.1 percent delinquency rate on auto loans compared with an 11 percent rate for borrowers who didn’t get a mortgage modification, according to a study by the Chicago-based credit-rating company. The delinquency rate on credit-card payments was 14 percent for homeowners with a modification, compared with 17 percent for those who didn’t get assistance.

The difference shows how modifications, while failing to prevent a majority of seriously delinquent borrowers from defaulting again, can help consumers become better risks for other lenders, said Charlie Wise, TransUnion’s director of research and consulting.

“Very clearly, it’s a driver of improved performance,” Wise said during an interview in Beverly Hills, California. “This is what allows you to turn the credit spigot back on.”

About 3.9 million delinquent homeowners received loan modifications from January 2009 through April of this year, according to a Ju…………… continues on Businessweek

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Consumer-debt bonds remain safe haven amid euro crisis

Posted by administrator | 22/06/12 | Tagged Credit Card Debt

Consumer-debt bonds remain safe haven amid euro crisis
News from Reuters:

Fri Jun 22, 2012 3:15pm EDT

NEW YORK, June 22 (IFR) – Issuance of bonds backed by US consumer debt payments such as auto loans, student loans and credit card debt has reached its highest level since the onset of the financial crisis.

The rebound reflects the expectation that these securities remain a safe-haven option for investors seeking cover from the flare-up in the eurozone and other bouts of macro-economic turbulence.

Year-to-date volume of US asset-backed securities (ABS) is up nearly 60% at US$ 93bn versus the comparable point last year. Total 2011 ABS volume was about US$ 128bn, versus US$ 135bn in 2010.

By comparison, however, total ABS issuance, including lower credit quality mortgage ABS, hit a record of US$ 1.25trn in 2006, according to the Securities Industry and Financial Markets Association.

But asset-backed securitization, which is largely driven by consumer demand and the usage of credit, has recently held its own as an efficient and low-cost funding mechanism for issuers in the post-crisis world, and in…………… continues on Reuters

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Charge off rates driven down by more hiring
News from Debtmerica Relief:

Delinquent and defaulted credit card debt has been on the decline for some time now, and new data suggests that instances of both are tied very closely to unemployment rates.

As the effects of the recession slip away and employers continue to expand their hiring practices, it’s expected that consumers will make more on-time payments into their various credit card debts, according to new data from the Mercator Advisory Group. When the recession began, instances of both charge offs and early-stage delinquency spiked at the same times unemployment did, and since it ended, both have moved slowly downward.

Now, both of these financial concerns are standing at or near all-time lows for all of the nation’s largest lenders, the report said. However, some experts note that even if unemployment continues to fall from its somewhat elevated state, there must be a logical bottoming-out in charge offs and del…………… continues on Debtmerica Relief

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Should you ditch your credit cards?

Posted by administrator | 22/06/12 | Tagged Credit Card

Should you ditch your credit cards?
News from CBS News:

(MoneyWatch) Some 50 million U.S. households have credit card debt, according to CreditCards.com. About two-thirds of Americans own a credit card, and about half of these folks carry a balance. But consumers’ reliance on credit cards appears to be at a turning point. Some reports suggest that more people are steadily paying down their debts or are even deciding to forgo credit cards altogether. Despite the existence new consumer protections for credit-card users, distrust of card issuers and their gimmicks also remains high. Then there’s the other reason — after a confidence-shaking recession, many people are wary of taking on debt.

For those who are determined to avoid using credit cards, the other payment options include using debit cards, checks, and cash. The number of consumers swiping a debit card to pay for purchases increased over the past two years as a result of the sluggish economy. Almost half of consumers surveyed said they believed debit cards helped control their spending.

It’s hard to argue with someone who decides to put aside their cred…………… continues on CBS News

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