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U.S. Retail Sales Since 1992

RetailMay2014_0This graph shows retail sales since 1992 through May 2014. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). On a monthly basis, retail sales increased 0.3% from April to May (seasonally adjusted), and sales were up 4.3% from May 2013.

The consensus is for retail sales to increase 0.6% in June, and to increase 0.5% ex-autos.

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Officials Decry Companies That Offer Help With Student Loans As Predatory; Student Loans Bankruptcy Discharge

student_debt_bankruptcyStudent loans are almost impossible to discharge in bankruptcy.  Nonetheless, debt settlement companies, which offer to help borrowers lower their monthly loan payments for a hefty upfront fee, have long been fraught with problems, as federal and state regulators are spotting new instances of abuse as the companies shift away from their traditional targets — credit card and mortgage debt — to zero in on student loans, the New York Times reported today. Illinois today is expected to become the first state to bring legal action against debt settlement companies in connection with their student loan practices, contending in two separate lawsuits that Broadsword Student Advantage and First American Tax Defense duped vulnerable borrowers into paying for help that never arrived. In her suit against the companies and their operators, Illinois Attorney General Lisa Madigan contends that the businesses lured borrowers into paying hundreds of dollars upfront, and in the case of Broadsword, $49.99 a month after that, according to copies of the lawsuits. The companies often misled customers about those fees, according to the suits, and in some instances feigned affiliation with federal relief programs.  Read the full story here.

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U.S. retirees return to reverse mortgages, big banks stay away

A retired couple take in the ocean during a visit to the beach in La Jolla, CaliforniaU.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead: the reverse mortgage, Reuters reported yesterday. Borrowers took out $15.3 billion of the loans in 2013, an increase of 20 percent from the year before, according to industry publication Inside Mortgage Finance. The record year was 2009, when there were $30.21 billion of reverse mortgage loans made. Brokers and bankers say that the 77 million retiring baby boomers will likely help fuel further growth in the loans in the coming years, making the business a growth spot in a home loan market where volumes have recently been declining. But at this stage, most bigger lenders are uncomfortable with the loans; for example, in 2011, Wells Fargo and Bank of America backed out of the business. Wells Fargo cites factors including unpredictable home values and the level of delinquencies as reasons for it to stay away from reverse mortgages. The government agency that guarantees these loans, the U.S. Federal Housing Administration, found them to be risky, too. Losses on reverse mortgages were a big reason for the agency’s $1.7 billion taxpayer bailout last year — and some experts worry they could lead to similar trouble again.  Full story here.