Industry analysts are generally optimistic that most of the large consumer ABS sectors will probably see a stable, positive year in 2016. However, they’re not very gung-ho about what kind of a year the government-backed student loan space is going to have. Analysts at Wells Fargo Securities think that consumer ABS should offer good relative value next year, based on solid credit fundamentals and robust structural protections. “We expect spreads to tighten in 2016 as the primary market recovers and the yield curve flattens along with Federal Reserve tightening,” they said in a recent outlook. “Spreads are likely to stay volatile and event-driven.” Further, “Weak demand and poor liquidity have been...

The CFPB indicated in its recently released 2015 rulemaking agenda that it is continuing to finalize a proposal it published in December 2014 to amend certain aspects of the bureau’s 2013 mortgage servicing rules. The proposal addressed, among other things, enhanced loss mitigation requirements and compliance with certain rules when the borrower is a potential or confirmed successor in interest or is in bankruptcy. “We have been conducting testing of periodic statements for consumers in bankruptcy and are working to develop the final rule for issuance in mid-2016,” the CFPB said. The bureau also will continue working to support implementation of the multiple mortgage rules required by the Dodd-Frank Act, such as the Home Mortgage Disclosure Act rule, the integrated ...

The CFPB recently petitioned the U.S. District Court for the District of Columbia to enforce a civil investigative demand (CID) it issued back in August to the Accrediting Council for Independent Colleges and Schools (ACICS), despite congressional objections and arm-twisting. The CID was issued during a bureau probe of possible violations of the Consumer Financial Protection Act of 2010 or other federal consumer financial protection laws. “The CID issued to ACICS relates to a bureau investigation to determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting of for-profit colleges” in violation of CFPA provisions addressing unfair, deceptive or abusive acts or practices, the CFPB told the court. The demand ...

Despite a recovering housing market, the number of first-time homebuyers fell to the lowest level it’s been in close to 30 years, according an annual survey from the National Association of Realtors. The share of first-time buyers in the marketplace declined for the third year in a row, dipping to 32 percent, from 33 percent a year ago. The NAR said it hasn’t been that low since the trade group began the survey in 1981. Recent numbers show it’s the second lowest it’s been since 1987, when first-timers accounted for 30 percent of the market. Historically, the long-term average shows...

Last week, the CFPB filed suit in U.S. District Court for the Southern District of California against Global Financial Support, Inc., and Armond Aria, owner and CEO, to stop what the bureau characterized as a nationwide student financial aid scam. The company, which has operated as Student Financial Resource Center and College Financial Advisory, allegedly ripped off tens of thousands of students and families by illegally charging millions of dollars in fees for sham financial services. The CFPB alleges that Aria and his businesses operate under the guise of a government- or university-affiliated operation, exploiting consumer uncertainty about how to use free federal financial aid resources provided by the Department of Education. The defendants allegedly “sent millions of deceptive letters ...

Five months after Corinthian Colleges went belly up, the CFPB succeeded in convincing a federal court to enter a final default judgement against the company, bringing to an end the litigation the bureau filed back in September 2014. The bureau accused Corinthian of luring tens of thousands of students into taking out private loans to cover expensive tuition costs by advertising bogus job prospects and career services. “Corinthian then used illegal debt collection tactics to strong-arm students into paying back those loans while still in school,” the CFPB stated. In its final judgment, the court ordered that Corinthian was liable for more than $530 million and prohibited the company from engaging in future misconduct. However, since the company’s assets are ...

Issuance of non-mortgage ABS fell 31.7 percent from the second quarter of 2015 to the third quarter, with significant declines in most major sectors, according to a new Inside MBS & ABS ranking and analysis. A total of $37.00 billion of ABS were issued in the third quarter, well off the pace set in the first half of the year. On a year-to-date basis, new ABS production was down 4.5 percent from the first nine months of 2014. That puts in jeopardy the string of four consecutive annual increases in ABS issuance since 2010 as the market enters the final lap of the year. Vehicle finance deals remained...[Includes two data tables]

The CFPB last week issued its latest annual report on student loan complaints, citing in particular concerns about repayment problems facing those with older federal student loans that were made by banks and other private lenders. “We found that servicing issues may make repaying student debt even harder for this group of borrowers, in particular,” said CFPB Acting Student Loan Ombudsman Seth Frotman. The report noted that outstanding federal student loans made by private lenders may have a higher concentration of borrowers in default or delinquency than the student loan market at-large. In another recently released report, the bureau estimated that more than 25 percent of student loan borrowers are delinquent or in default market-wide. The CFPB observed that at ...

The results of a new survey conducted for NeighborWorks America suggest that student loan debt is an obstacle for a growing share of potential homebuyers. The congressionally chartered organization with a focus on housing counseling also found confusion among potential homebuyers regarding the mortgage market. Some 57 percent of respondents said student loan debt was an obstacle to purchasing a home, up from a 49 percent share last year. The survey involved 1,000 adults. And 76 percent of respondents with student debt said the homebuying process is complicated, up from a 70 percent share in 2014. The greatest obstacle for potential homebuyers continues...

The CFPB, the Department of Education, and the Department of the Treasury late last week issued a joint statement of principles “to improve student loan servicing practices, promote borrower success and minimize defaults.” The agencies said they are committed to working together so that all student loan borrowers have access to the information they need to repay their loans responsibly and avoid default, and to protections so that they will be treated fairly even if they are struggling to repay their loans.They also want student loan borrowers to have access to certain mechanisms so that “errors are resolved expeditiously, and assurances that student loan servicers, both in the marketplace and through federally-contracted companies, are held accountable for their conduct.” ...