CFPB: Student loans killing the drive to buy homes
WASHINGTON – May 20, 2014 – Armed with supporting data from different sources, Consumer Financial Protection Bureau (CFPB) director Richard Cordray emphasized the need for his agency to take action on the hurdles that are keeping young Americans from buying homes.
"We're seeing more student-loan borrowers shy away from making this investment," he recently told the Boulder Summer Conference on Consumer Financial Decision Making.
Cordray cited a poll conducted by the National Association of Realtors, which reported that 49 percent of Americans named student loan debt as a "huge obstacle" to homeownership. Moreover, he said, "According to an analysis by the Federal Reserve Bank of New York, for the first time in at least a decade, households with student loan debt are less likely to have a mortgage than those without student loan debt."
Consumers place some of the blame on loan servicers that are not being taken to task for sketchy behavior, like making it difficult to prepay and charging exorbitant fees for servicing processing errors.
Cordray said the CFPB would dispatch examiners to identify, report and penalize servicers for such activity. It is also "working closely with other regulators to incentivize student loan servicers to provide more modification and refinancing options for private student loans."
Source: Housing Wire (05/19/14) Gaffney, Jacob© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688