What You Need to Know About Bonds

Ever wonder why prices of bonds and bond funds do what they do when interest rates fluctuate? Here’s what you need to know about how bonds work — as well as what you may think you already know that’s wrong. When you buy a bond, you are merely lending money to a government entity or corporation. Assuming there is no default, they will pay you interest for a period of time and then give you back your principal. Bonds have …

CFPB: Reverse Mortgage Ads Can Confuse More Than Inform

Advertisements touting reverse mortgages often leave older consumers confused about the loan terms and unaware of the risks, according to a new report from the Consumer Financial Protection Bureau. “Perhaps most concerning of all, the ads left the consumers believing that if they purchase a reverse mortgage loan, they will be able to rest assured that they can live in their homes and enjoy financial security for the rest of their lives,” CFPB Director Richard Cordray said in a teleconference. …

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. …

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 …

Your Biggest Gripe: Debt Collectors!

The Consumer Financial Protection Bureau gets more complaints from older Americans about debt collectors than any other issue. According to a report released Wednesday by the CFPB’s Office of Older Americans, the agency received 8,700 debt collection complaints in the past 15 months. Consumers complained that debt collectors: – Try to collect the debts of dead relatives — even years after the estate has been settled. – Threaten to garnish Social Security and other federal benefits, which they can’t legally do. – Attempt …

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 …