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Thursday, May 15, 2014

Student Loans Soar To Record $1.111 Trillion, Up 12% In Past Year

When the Fed releases its quarterly household credit report, the one item most focused on is the amount of mortgages outstanding and originated in the prior quarter, since courtesy of its monthly consumer credit updates we know that US households have largely given up charging their credit cards at the expense of non-revolving student and car loans. So here is the summary.

First, the good news: courtesy of ZIRP mortgage defaults and discharges tumbled in Q1, resulting in an increase in total mortgage debt balances of $8.17 billion, or an increase of $116 billion in the quarter.

Now, the bad news: the increase in total mortgage balances had nothing to do with a surge in mortgage demand. Quite the contrary, as we have been reporting and as bank mortgage origination bankers have felt first hand, for whatever reason mortgage origination as a business has virtually slammed shut. The Fed confirmed as much when it reported just $332 billion in originations in Q1: well below the $452 billion in Q4, and certainly below the $577 billion a year ago.

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7 comments:

  1. Many of the students are taking out student loans knowing they aren't going to have to pay for them thanks to the idiots that voted for Obama. The tax payers will be paying for those loans.

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  2. Take a look at the salaries of yesterday post at U of MD. Hundreds of the elite making from $300k to $900k in Annual Salary!!! Hundreds more making $150k to $300k, this is where your tuition dollars are going!!! And your party kids are graduating with a degree that leads to no job. YOUR PARENTS ARE THE REAL IDOTS, BTW, DID YOU GO TO COLLEGE??

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  3. 633, please show where Obama has forgiven student debt because Sallie Mae and USDOE are both breathing down my back. Thanks in advance.

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  4. did you know that the US Dept of Ed has a vested interest in the student loan scam? follow the money!

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  5. There needs to be an underwriting process with future earnings considered. Right now anyone who needs aid can get it regardless of the future earnings potential of their chosen career.

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  6. College was never supposed to be for everyone. Just go to wor-wic and be a nurse, better yet go in the coast gaurd and let them pay you to become a nurse.

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  7. They need to drop the interest from 6 percent down to 1 percent on student loans

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