{"id":54599,"date":"2020-08-08T07:10:06","date_gmt":"2020-08-08T12:10:06","guid":{"rendered":"https:\/\/olduvai.ca\/?p=54599"},"modified":"2020-08-08T07:10:44","modified_gmt":"2020-08-08T12:10:44","slug":"no-payment-no-problem-bizarre-new-world-of-consumer-debt","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=54599","title":{"rendered":"No Payment, No Problem: Bizarre New World of Consumer Debt"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/wolfstreet.com\/2020\/08\/07\/no-payment-no-problem-bizarre-new-world-of-consumer-debt\/\">No Payment, No Problem: Bizarre New World of Consumer Debt<\/a><\/h3>\n\n\n\n<p><strong>All kinds of weird records are being broken. But it\u2019s scheduled to expire, and then what?<\/strong><\/p>\n\n\n\n<p>The New York Fed released a doozie of a household credit report. It summarized what individual lenders have been reporting about their own practices: If you can\u2019t make the payments on your mortgage, auto loan, credit card debt, or student loan, just ask for a deferral or forbearance, and you won\u2019t have to make the payments, and the loan won\u2019t count as delinquent if it wasn\u2019t delinquent before. And even if it was delinquent before, you can \u201ccure\u201d a delinquency by getting the loan deferred and modified. No payment, no problem.<\/p>\n\n\n\n<p><strong>Nearly all student loans go into forbearance, delinquencies plunge.<\/strong><\/p>\n\n\n\n<p>Student loan borrowers were automatically rolled into forbearance under the CARES Act, and even though many students had stopped making payments, delinquency rates plunged because the Department of Education had decided to report as \u201ccurrent\u201d all those loans that are in forbearance, even if they were delinquent. Yup, according to&nbsp;<a href=\"https:\/\/www.newyorkfed.org\/microeconomics\/hhdc\" target=\"_blank\" rel=\"noreferrer noopener\">New York Fed data<\/a>, the delinquency rate of student loan borrowers, though many had stopped making payments, plunged from 10.75% in Q1, to 6.97% in Q2, the lowest since 2007:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2020\/08\/US-consumer-credit-deferrals-2020-08-07-student-loan-delinquencies-.png\" alt=\"\" class=\"wp-image-62985\"\/><\/figure>\n\n\n\n<p>Student loan forbearance is available until September 30, and interest is waived until then, instead of being added to the loan. In a&nbsp;<a href=\"https:\/\/libertystreeteconomics.newyorkfed.org\/2020\/08\/a-monthly-peek-into-americans-credit-during-the-covid-19-pandemic.html\" target=\"_blank\" rel=\"noreferrer noopener\">blog post<\/a>, the New York Fed said that 88% of the student-loan borrowers, including private-loan borrowers and &nbsp;Federal Family Education Loan borrowers, had a \u201cscheduled payment of $0,\u201d meaning that at least 88% of the student loans were in some form of forbearance. Until September 30. And then what?<\/p>\n\n\n\n<p><strong>Delinquent loans are \u201ccured\u201d without catch-up payments.<\/strong><\/p>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>No Payment, No Problem: Bizarre New World of Consumer Debt All kinds of weird records are being broken. But it\u2019s scheduled to expire, and then what? The New York Fed released a doozie of a household credit report. It summarized what individual lenders have been reporting about their own practices: If you can\u2019t make the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,8559,30120,488,4254,4255],"class_list":["post-54599","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-deferral","tag-forbearance","tag-loans","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=54599"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54599\/revisions"}],"predecessor-version":[{"id":54600,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/54599\/revisions\/54600"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=54599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=54599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=54599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}