Reverse Mortgages Now Harder to Get

If you’ve thought about taking out a reverse mortgage, be aware that new rules that recently kicked in might make it harder for you to qualify. The U.S. Department of Housing and Urban Development tightened lending criteria late last month. The changes require that lenders determine whether would-be borrowers have enough income to keep up with property taxes and homeowners insurance so they don’t default on the loan and, possibly, lose their home. HUD’s Federal Housing Administration insures most reverse mortgages. …

Surprise! Reverse Mortgages Are Very Confusing

A three-year examination of reverse mortgage complaints to the Consumer Financial Protection Bureau shows that borrowers often didn’t understand the terms of those loans, including how quickly their loan balances would go up and their home equity would fall, the bureau said in a new report. Reverse mortgages allow homeowners age 62 and older to tap into the equity in their homes. They’re different from home equity credit lines or home equity loans because a reverse mortgage generally is paid back only when the homeowner …

Banks Ease Terms for Struggling Student Borrowers

Big banks are beginning to cut some slack to distressed student-loan borrowers. Wells Fargo announced a new program this week that will lower the interest rate on loans so payments will be more affordable based on a struggling borrower’s income. The bank will review borrowers’ financial situations to determine whether they qualify for short- or long-term loan modification. >> 8 Hidden College Expenses According to the Wall Street Journal, both borrowers and cosigners will have to show financial hardship to get a modification. Modifications …

Are Lenders Driving Student Loan Borrowers Into Default?

Borrowers struggling to repay private student loans say they have little choice but to default because lenders won’t revise payments to make them affordable, according to a new report by the Consumer Financial Protection Bureau. “We are hearing from consumers that they are driven into default because private student loan companies are not providing concrete loan modification options,” CFPB Director Richard Cordray said in a statement. “Struggling private student loan borrowers are finding themselves out of luck and out of …

Regulator Seeks Greater Oversight of Auto Financing

The Consumer Financial Protection Bureau wants to extend its oversight to large nonbank auto-finance companies to make sure they are not discriminating against consumers. The CFPB announced today its proposed rule to expand its supervision to these companies, which would include the finance arms of auto manufacturers. “Nonbank auto-finance companies extend hundreds of billions of dollars in credit to American consumers, yet they have never been supervised at the federal level,” CFPB Director Richard Cordray said in a statement. “Today’s proposal …

Payday Lender Ordered to Pay $10 Million Over Collection Practices

Ace Cash Express, one of the nation’s largest payday lenders, has agreed to pay a $10 million settlement over its collection practices. The Consumer Financial Protection Bureau said that Ace, based in Irving, Tex., must refund $5 million to customers who fell victim to such practices from March 2011 to September 2012; it must also pay a $5 million civil penalty. Payday loans are taken out by people who need quick cash between paychecks. Companies such as Ace Cash Express have been known …