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Hosting a financial coach in your community

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It’s no secret that having a trusted, well-informed advisor or financial coach can increase your odds of financial success. We know that some people who are transitioning, perhaps from military service, being unemployed, or another tough financial situation, might especially benefit from this one-on-one service focused on their financial and life goals.

That’s why we announced an initiative last year to place trained financial coaches in organizations to provide coaching to consumers, including veterans and those who are low-income or economically vulnerable. Following a full and open competitive procurement process, in April 2014 we contracted with the Armed Forces Services Corporation (AFSC), a Service-Disabled Veteran-Owned Business (SDVOB), to run this initiative. The financial coaches will work in organizations that are already providing other services, including job training, education, social, and housing services.

Here’s how you or your organization can help

AFSC is looking for 20 organizations, in geographically diverse locations across the country that serve economically vulnerable consumers, to host financial coaches. To be clear, this is not an opportunity for a grant, contract, sub-contract, or funding – just to have a financial coach placed on-site at an existing service delivery location. Check out the criteria and see if your organization or one in your community might be the right fit to host a financial coach. If you think it is, send a submission by October 15, 2014.

New Project Catalyst research pilot to study early intervention credit counseling

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Today, we’re announcing a research pilot aimed at assessing the potential impact of early intervention credit counseling. We know that defaulting on credit card debt is a very stressful event for anyone and impacts consumers’ ability to access credit in the future. We’d like to use this opportunity to explore what ways may help consumers better manage their credit card debt and avoid default.

Many people who are having trouble paying their credit card debt could benefit from the help of credit counselors, who can help them create more practical budgets and more manageable schedules to repay debt.

Barclaycard (Barclays Bank Delaware) and Clarifi (Consumer Credit Counseling Service of Delaware Valley) have partnered on a pilot program in which Barclaycard will offer cardholders who may need help with managing their credit card debt the opportunity to get help from Clarifi. Cardholders can then choose to enroll in Clarifi’s credit counseling services at no cost to them. As part of our Project Catalyst initiative, Barclaycard and Clarifi have agreed to share insights from their trial project with us. The information shared by Barclaycard and Clarifi will be de-identified, and appropriate precautions will be taken to ensure that individual consumers cannot be identified through the data. The program can help inform our work and our understanding of what strategies may help consumers better manage their existing debt as well as improve their credit scores and their access to credit in the long run.

As part of Project Catalyst, we continue to encourage consumer-friendly innovations. Through collaborations such as this one, we’ll have the opportunity to improve our understanding of what works best for consumers in the consumer financial marketplace.

Updated reverse mortgage guide: Two things you should know

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More and more homeowners are considering tapping their home equity as they approach retirement age. Getting a reverse mortgage is one way that some older homeowners can do that. Reverse mortgages are a special type of home equity loan sold to homeowners aged 62 years and older, which are repaid when the borrowers sell the home, move out, or die. It’s a complicated type of loan that works best for homeowners who carefully consider all of their options.

Things to consider

Before borrowing, seniors and their families should consider:

  • The cost of homeowners’ insurance and taxes
  • Plans for staying in the home or leaving it to family members
  • Plans for dependents or others living in the home
  • Alternatives to reverse mortgages

Because some important things about reverse mortgages have changed recently, we’ve updated our guide to reverse mortgages.

First-year payout limits

One of these changes limits the amount of money you can draw from your loan in the first year. Borrowers often get into trouble by taking a lump-sum payment early on. It may feel great to get a big payment up front, but borrowers can outlive this money – which spells financial trouble for borrowers who live longer lives.

This limit encourages borrowers to make their money last longer. Borrowers can still take out lump-sum single payments – but this is still a risky choice. Borrowers should strongly consider the monthly payment or line of credit options before choosing to get a lump-sum. These options provide more long-term security than lump-sum payments.

Protections for non-borrowing spouses

Another important change is for couples considering a reverse mortgage. In the past, couples who took out a reverse mortgage loan in the name of only one spouse ran into trouble when the borrowing spouse passed away. When a borrower died, the “non-borrowing spouse” had to pay back the reverse mortgage or move out. Many surviving spouses were surprised to learn this, and lost their homes. With recent changes, a non-borrowing spouse may be able continue to live in the home under certain conditions, even after the spouse who signed the loan passes away. However, the non-borrowing spouse will still stop receiving money from the reverse mortgage after his or her spouse dies.

For couples considering a reverse mortgage, borrowing together makes more sense. If both spouses sign the reverse mortgage, then the surviving spouse can continue to receive monthly payments or use an existing line of credit. It also ensures that a surviving spouse may live in the home after his or her spouse (co-borrower) dies.

These changes help protect reverse mortgage borrowers, but make no mistake—reverse mortgages are still not right for everyone and can be risky and expensive. If you’re considering a reverse mortgage, get the information you need to make an informed decision and give yourself time to weigh your options.

Check out our guide to reverse mortgages for older homeowners and their families.

We can help you fight improper actions by debt collectors: Venida’s story

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Consumers often come to us with complaints about problems with debt collection and related credit reporting issues. We forward their complaints to the companies and work to get a response from them. In Venida’s case, within weeks of submitting her complaints, she was able to get the inaccurate information on her credit reports removed.

“Now that I have received the help from [the] CFPB”, she said, “I feel as if I can go along with my life enjoying my grandchildren and my children…and not worry about… whether I’m going to be sued.” She continued, “It’s so important because older people my age get taken advantage of. These collections agencies have them thinking that they owe this, they owe that. They don’t know that there’s a resource out there that can help them like the CFPB.”

We’re glad Venida got the help she needed, and we want to make sure that you know that we’re here for you too. To share your experience or learn more from others, visit us at consumerfinance.gov/yourstory.

Don’t let your student debt stop you from serving your country

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Last year, the CFPB launched an initiative to enlist the support of public service employers to help their employees tackle their student debt. We also published a report, which estimated that approximately one-fourth of the labor force is working in a public service profession and potentially eligible for existing benefits to help them manage their student loans.

Today, we joined the Department of Education, the Peace Corps, and the Corporation for National and Community Service to release new resources for employees, volunteers, and recent graduates with student loan debt. Whether you choose to serve in the military, volunteer in the Peace Corps, or pursue national service, we know that managing your money while serving your country can be hard. This is particularly true if you have student loans.

To help, we’ve developed new customized guides for members of the military, for Peace Corps volunteers, and for participants in national service programs with student debt. In addition, we have partnered with the Peace Corps and the AmeriCorps programs to help their members understand how to qualify for loan forgiveness and other student loan benefits—part of our financial education project focused on public service and student debt.

Student loan borrowers working in public service have access to a range of existing benefits designed to help them manage their debt. One program provides borrowers that spend a decade or more in service with the opportunity to have their loans forgiven after 10 years (120 months) of on-time payments. There are also a range of other existing benefits for servicemembers, teachers and other public servants.

Getting started

If you’re working in public service, you should be careful when considering options that postpone your monthly payment, such as forbearance. Generally, these options are designed to help borrowers weather a short-term financial shock rather than to serve as the foundation of a long-term strategy to manage your debt. In many cases, they will lead to a much higher balance when you complete your service and resume making payments.

Here is some helpful advice to help you understand your options. This information and answers to other questions about student loans are also available through Ask CFPB.

  • Most borrowers should say no to deferment and forbearance. When you put off making payments, interest may continue to accrue. This means that once you complete your service, you’ll discover that your student loan balance has grown. You may also miss out on the chance to count your service toward loan forgiveness. Some national service programs may offer to help you with your student loan interest once you complete your service, so make sure you ask about this benefit before you decide how to manage your loans.
  • Service in the military, Peace Corps and national service programs is “public service.” This means that, if you have qualifying loans, every month you serve while enrolled in an income-driven payment plan is a month that counts toward Public Service Loan Forgiveness. Under this program, if you make 120 qualifying monthly payments while working for an eligible public service organization, you are eligible to have any remaining balance forgiven on your qualifying loans.
  • Income-driven payment plans are the best bet for most borrowers in service. If you have federal Direct Loans, an income-driven payment plan, like Income Based Repayment (IBR) or Pay As You Earn (PAYE), is the best plan for most people working in public service. Your monthly “payment” may be as low as $0 per month, but you’ll make progress toward loan forgiveness each month you’re enrolled. And, if you have subsidized loans, for the first three years, you won’t be charged more in interest than the amount of your monthly payment.
  • You may qualify for other benefits, too. For example, servicemembers may be entitled to lower their interest rate under the Servicemembers Civil Relief Act (SCRA). If you are a Peace Corps volunteer or servicemember, you can qualify for loan cancellation if you have a Perkins loan. Check to see if you’re eligible for these benefits before consolidating your loans – you could lose the benefits, otherwise. Contact your student loan servicer to learn more about benefits for borrowers engaged in service.

Your student loan complaints revealed that student loan servicers don’t always make it easy to enroll in benefits for servicemembers. After hearing from you, federal regulators fined a large student loan servicer for its mistreatment of military families and ordered tens of millions in refunds.

Tell your employer about the CFPB’s pledge to tackle student debt for public servants. We will provide your employer with guidance and training on how to help you and your colleagues navigate their benefits.

If you’re having a problem with a student loan, you can submit a complaint online or call us at (855) 411-2372. If you have questions about repaying student loans, check out our Repay Student Debt tool to find out how you can tackle your student loan debt.

Rohit Chopra is the CFPB’s Student Loan Ombudsman. To learn more about our work for students and young Americans, visit consumerfinance.gov/students.

Updated mortgage data available

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Last year, we released a web-based tool that provides the public with easier access to mortgage data for 2007 through 2012. Today, we’re updating the database with 2013 data, in coordination with the Federal Financial Institutions Examination Council.

What’s HMDA?

The Home Mortgage Disclosure Act or HMDA requires many financial institutions to maintain, report, and publicly disclose information about mortgages. HMDA data for 2013 included approximately 17 million records from 7,190 financial institutions.

Get started

If you’re new to HMDA data, start with our introductory video. You’ll learn about the data, how it’s collected, why it’s useful, and what variables it contains. Then, check out our maps and charts.

Explore the data and do your own analyses. You can start with our suggested filters, and then customize them to fit your needs. Use the summary tables to compare data across state, loan type, and more. Want a chart? You can create a summary table and then download it to create a chart using your favorite software.

Share your findings

We’re excited to see what you do, and encourage you to explore the data. Leave us a comment with your ideas or use #cfpbdata on Twitter to share what you find.

The CFPB blog aims to facilitate conversations about our work. We want your comments to drive this conversation. Please be courteous, constructive, and on-topic. To help make the conversation productive, we encourage you to read our comment policy before posting. Comments on any post remain open for seven days from the date it was posted.