A recent UBS report says that housing prices in areas where the economies depend on leisure and hospitality will be under greater pressure than other areas. The report mentions Las Vegas, Miami and Orlando, which were some of the more disastrous markets during the subprime crisis.
Home prices were hot at the start of 2020. As we muster through the pandemic, gains in values will likely slow. However, prices are not expected to fall nationally. There is a severe shortage of homes for sale which is unlike the subprime mortgage crisis. Home values fell as much as 50% in some markets 10-years back. Now, the supply-demand imbalance favors stronger prices.
Although numbers are still rising compared to 2019, (in the first two weeks of March, new listings were up 5% annually on average), slower gains are indicative to the current market, (the second week of April, new listing were down 47%). There has also been a slowdown in asking prices. In early March, median list prices were, on-average, up by 4.4%. The first half of April reported the slowest growth in seven years with an increase of just under 1%.
Six Major Trends in Lending for Financial Marketers this Year
The forecast for most forms of consumer credit is good. Lending volume, growth in balances, and overall performance look upbeat for the year ahead. Banks and credit unions will try new marketing strategies, explore new products, and experiment with new technologies. Over the next six-weeks, we’ll review major trends in consumer lending that financial marketers should watch closely.
#3 Auto Lending: More Informed, Less Understanding
A mix of economic trends will impact auto lending. Rising tariffs and a preference for SUVs and hybrids will bump up pricing and impact affordability. Low unemployment and rising Gross Domestic Product will support continued growth and positive credit performance.
Overall, the auto finance market continues to show signs of health and growth in many ways.
Auto shopping and auto lending processes have grown more transparent as more and more resources can be accessed on the web. But some of the information consumers think they are armed with is misleading or plain wrong. For example, the credit score methodologies used by auto lenders and auto dealers differs from many of the scores that consumers obtain from websites. This confuses the process. Clearing up that confusion is another job for bank and credit union marketers.
Another new factor is alternative credit data — tapping nontraditional sources of payment information to help judge creditworthiness. Use of utility bill payment patterns and the like is becoming more common among lenders, especially non-bank auto finance companies.
Read more here.
Did you know that one of the most googled student loan questions is; “Can you discharge your student loans in bankruptcy?”
In 2005, Congress passed, and President George W. Bush signed, the Bankruptcy Abuse Prevention and Consumer Protection Act, which exempted federal and private students loans from discharge.
Prior to 1976, you could discharge your student loans in bankruptcy.
Then, student loans were dischargeable if they had been in repayment for five years. Subsequently, that period was extended to seven years. In 1998, Congress removed dischargeablility except if a debtor could show that paying back the student loans would create an undue hardship. In 2005, Congress extended this protection to private student loans.
In order to have a student loan discharged through bankruptcy, an Adversary Proceeding (a lawsuit within bankruptcy court) must be filed, where a debtor claims that paying the student loan would create an undue hardship for the debtor.