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<div type="image" title="Data from RBI suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024." msid="115250619" hostid="261" sizebytes="118350" caption="&amp;lt;p&amp;gt;Data from RBI suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024.&amp;lt;/p&amp;gt;"></div> “Ye le beta, humare khaandani sone ke gehne. Ise girvi rakhva de, shayad kuch paise aa jaye ghar main.” How many times have we seen similar dialogues repeat itself in Bollywood films of the 70s and 80s—abject poverty and a frail-looking old mother pleading to her son to pawn the family’s heirloom <keyword id="18712" type="General" weightage="20" keywordseo="gold" source="Orion">gold</keyword> ornaments to a jeweller, all to get a few bucks? Well, if you’d ask that son in 2024, he’d rather hit the loan button on his <keyword id="19977340" type="General" weightage="20" keywordseo="demat" source="keywords">Demat</keyword> account than pawn his mother’s gold jewellery. Given how Indians are rapidly resorting to taking loans against their investments in shares and mutual funds, these might as well be a cherished family heirloom in today’s time. Fair warning though; it's not as if gold and loans against it are going down in India’s lending scene. It's very much the opposite, shining brighter than ever! The secured loan category is having its time in the spotlight, and people are certainly looking beyond land and property to get their hands on some extra monies! But what is funding the steep rise behind these loans? And are they as failsafe and secure as they’re made out to be? We decode for you in this week’s Simply Put. <h2>The great Indian pawning party</h2>Pawning one’s gold has been, by far, the OG Indian financial move to get a loan. That continues well into 2024, and apparently, more so when India decides to wed and celebrate! Data from <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024. It looks like Gold took the motto of rise and shine too seriously! Table 1: Growth in gold loans <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Amount (In Rs crore) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2022 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">85,009 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">89,370 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2023 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">97,426 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">March 2024 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,02,562 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">September 2024 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,47,081 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: RBI data While the world continues to be riled up in multiple geopolitical crises in 2024, gold has been making merry of these tough times. Thus far this year, domestic gold prices have grown by 23%, outperforming benchmark indices like Nifty and Sensex by a mile, which have gone up by 9.85% and 8.86%, respectively. The growth in gold loan disbursal rates month on month this year could also put Nifty and Sensex’s growth to shame. In just September 2024, gold loans grew an astounding 51%, up from 40.9% in August, 30.5% in June, and just 14.8% in March. <h2>Hey, wait up for me, says <keyword id="23953567" type="General" weightage="20" keywordseo="las" source="keywords">LAS</keyword></h2>In lockstep with the elder, gold loan sibling, advances against shares and bonds have also been inching up since 2022. Data from RBI (Reserve Bank of India) notes that as of September 2022, the outstanding quantum of loans that were taken against shares (LAS) and bonds stood at Rs 7,397.94 crores. This inched up to Rs 7,764 crore in September 2023. Come 2024, and it looked like this was LAS’ time to shine. Loans swiftly skyrocketed, with outstanding loans in this category going up from Rs 8,492 crore in March 2022 to a staggering Rs 9,546 crore at the end of September 2024. Naturally, the smoke of LAS has its fire in the record inflows that Indians are pouring into the stock market and mutual funds month on month. Per AMFI (<keyword id="20090034" type="General" weightage="20" keywordseo="association-of-mutual-funds" source="keywords">Association of Mutual Funds</keyword> in India), the net AUM (assets under management) of India’s mutual fund industry grew to Rs 67,25,614.61 crores in October 2024, up from Rs 67,09,259.24 crores in September 2024. Even the number of retail mutual fund folios, which include equity, hybrid, and solution-oriented mutual funds, burgeoned to 17,23,52,296 in October, as compared to 16,81,61,366 in September. The same goes for stock investments in India, where the number of new demat accounts that are added every month just simply refuses to climb down. As of last month, total demat accounts in the country stood at 17.9 crore, which is more than the entire population of full-fledged nations like Japan (12.45 crore), Russia (14.38 crore), and Bangladesh (17.3 crore). In fact, since February this year, the monthly growth of LAS has been hitting double digits. From 11.3% in March to 21.6% in May to 26.8% in August, growth in LAS has been exceptional, hitting 22.9% in September this year. For context, monthly growth in the LAS segment was at a mere 5% in September 2023. <h2>What's driving the growth?</h2>It's a win-win for both the bank and the customer. Customers love them because LAS is available at a lower interest rate compared to unsecured personal loans. You can get a loan at an interest rate of anywhere between 9 and 12% by pledging your gold, MF units, or shares. Compare this to over 10-28% rates, which is the range where unsecured personal loans charge interest. Banks love <keyword id="827883" type="General" weightage="100" keywordseo="secured-loans" source="Orion">secured loans</keyword> since they are well-secured. In case you default on paying back, the bank can sell off your gold, shares, or mutual fund units to recover the amount. This takes a lot of stress off the banks, which are already dealing with secured loans’ riskier sibling-unsecured lending. High NPAs (non-performing assets) and non-payments in the unsecured borrowing space have already put RBI on red alert, which is why the apex bank is tightening the screws on unsecured lending, which was well on its way to becoming a ticking time bomb. As a result, credit growth has moderated to 12.8% YoY in October, as against the 19.3% rise recorded in the year-ago period. Yet it's not like the banks won't feel the heat. Analysts at Nomura note that personal loan delinquencies in India that have been overdue by over 90 days rose to 5.1% in the last financial year, as opposed to just 3.9% in the year prior. <h2>How does it work?</h2>Both these loans work on a similar principle: Your loan amount is equal to a certain percentage of the actual market value of your asset. This is known as the <keyword id="20051485" type="General" weightage="20" keywordseo="ltv" source="keywords">LTV</keyword> (loan-to-value ratio). In the case of gold and debt mutual funds, RBI mandates that this LTV be about 75-80%. So, for every Rs 100 of gold or debt mutual fund unit you pledge, your maximum loan amount cannot exceed Rs 80. If you pledge gold, which has a market value of Rs 10 lakh, you can take a loan of up to Rs 8,00,000. In the case of shares and mutual fund units, this limit is set at 50%. So, your shares worth Rs 5,00,000 can only get you a loan worth Rs 2,50,000. But the bright side? You can continue earning returns on your investments and pay interest only on the amount you use, since this loan works as an overdraft facility. <h2>Super safe, you say?</h2>Interest rates on both of these loans are very much dependent on the market value of the asset, which wildly fluctuates on a day-to-day basis. So, in case the value of your asset falls, you’ll have to keep a margin or more of the same asset in order to continue with the loan and maintain the LTV balance. Failure to do so could mean the bank can even sell off your asset. Says financial planner Nema Chaya Buch. “Yes, LAS offers easy availability of funds since these loans come with a lower interest rate as compared to personal loans. Also, you continue to earn average returns of 10–13% on your equity investments. But the downside is, in case of emergency, those pledged securities cannot be sold. Also, if the equity market goes down, then the bank may ask for additional collateral. Raghvendra Nath, MD, Ladderup Wealth Management notes that taking a LAS is best when the value of your securities has appreciated significantly. “This allows you to maximize the loan amount based on your collateral while also addressing financial needs without having to liquidate your investment portfolio. However, there are notable disadvantages to consider. The market risk is significant; a substantial decline in market value could lead to margin calls, which may incur fees and charges if there are delays or prepayments, ultimately increasing the effective cost of borrowing. Furthermore, failure to make timely payments could result in the loss of your assets.”. Umesh Mohanan, ED &amp; CEO, of Indel Money, cautions that one should have a sufficient quantity of gold to get the loan amount one wants. "According to the current RBI rules, the loan applicant/borrower can draw up to 75% of the total market value of the collateral/gold jewellery. So, always carry a sufficient quantity of gold based on one’s loan requirement. “The most important thing is that the valuation of the gold depends on the purity of the gold. If the borrower pledges gold with higher purity, such as 24 carats or 22 carats, he will get the maximum loan amount," he adds.

Simply Put: Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

<div type="image" title="The RBI has cracked the regulatory whip on NBFCs and banks, who&amp;#39;ve been pushing microfinance and unsecured loans aggressively to grow their loan books." agency="ANI" msid="114778648" hostid="261" caption="&amp;lt;p&amp;gt;The RBI has cracked the regulatory whip on NBFCs and banks, who&amp;#39;ve been pushing microfinance and unsecured loans aggressively to grow their loan books.&amp;lt;/p&amp;gt;"></div> Imagine this. You have a younger sibling you’re mighty envious of. And why not? Unlike you, they seem to enjoy all the freedom and money in the world. They party like there’s no tomorrow, and here you are, stuck in a boring, ultra-disciplined but responsible routine that feels completely devoid of any independence, and mostly, funds. But of late, things are changing. This sibling is in massive trouble and just cannot escape the parent’s wrath anymore. Long story short, the party is over, and it is time to go back home. The rising defaults on this sibling’s part have now begun pulling the entire house down, thereby attracting the regulator’s ire. <h2>The Wild West of <keyword id="113684" type="General" weightage="20" keywordseo="microfinance" source="Orion">microfinance</keyword> and unsecured loans</h2>It's hard to ignore the issues with microfinance and unsecured loans in India. Many saw them as a small gamble and ignored the rising defaults much like the younger siblings’ tantrums, and now they find themselves in hot waters. The skyrocketing instances of non-payments aren't a micro-issue anymore and are threatening the stability of the entire banking system. In the quarter ended September 30, 2024, 5 of India’s 8 largest private sector <keyword id="19934118" type="General" weightage="20" keywordseo="banks" source="keywords">banks</keyword> reported a steep rise in their bad loan book, mostly thanks to microfinance loans. Some banks, in a bid to strengthen their fortress against these <keyword id="142154" type="General" weightage="100" keywordseo="bad-loans" source="Orion">bad loans</keyword>, have significantly upped their provisions. For instance, IndusInd Bank set aside Rs 525 crore during July and September 2024 to battle the menace of defaults on microfinance loans, which make up about 9% of its total loan book. See, banks rely heavily on their interest income, which they earn from advancing loans. Any loan where the borrower has not paid interest to the bank or defaulted for 90 days or more becomes bad, i.e. an NPA, or non-performing asset for the bank. And who likes things going bad? Simply put, there has been a steep rise in three areas, much to the dislike of banks and MFIs (micro-finance institutions). But hey, it's mostly their doing! <ol><li>GNPA ratio (gross net performing assets): The quantum of non-performing assets a bank has in proportion to its total assets.</li><li>Provision: The amount banks set aside to take care of such NPAs.</li><li>Slippage ratio: The rate at which good girls go bad, or the speed at which good loans turn into NPAs</li></ol>But how are these plaguing the Indian banking sector? And what does the road ahead look like? We decode it for you. <h2> Microfinance: A not-so-micro-menace</h2>Microfinance loans were initially brought forth for low-income households and individuals i.e. for those who might not generally have access to traditional ways of credit, like bank loans and more. They don’t require collateral or an asset to be pledged in lieu of the loan, making it a tad bit easier for borrowers. As of June 2024, the amount of outstanding loans in the microfinance industry stood at a staggering Rs 4,20,256 crore. Of this, NBFC-MFIs accounted for 40% and banks made for 33% of these. In 2022, RBI, in a bid to inspire some competition in this space, did something radical-they did away with the ceiling on how much interest MFIs could charge their customers. Previously, MFIs could add up to 12% to their cost of acquiring funds to determine the final interest rate chargeable to the consumer. So, assuming that Bank A incurs a 5% cost to acquire funds for further loaning, A could charge up to 17% interest from the end consumer. So, interest rates were in the hands of MFIs, and boy, did they have a gala time with it. Instead of spurring some healthy competition, as RBI expected, MFIs and banks went rogue and all guns blazing, competing for the title of “Who will charge the highest interest?” Recently, RBI banned 4 microfinance institutions (MFIs), namely Asirvad Micro Finance Limited, Arohan Financial Services Limited, DMI Finance Private Limited, and <keyword id="20117932" type="General" weightage="20" keywordseo="navi-finserv" source="keywords">Navi Finserv</keyword> from disbursing loans effective October 21, 2024. Why? Because they were charging 14% extra interest over their original cost of funds. To maintain their loan books (and pockets), banks and NBFCs resorted to shady practices like netting off loans, which RBI has now advised MFIs against. Here, lenders allow borrowers to settle a previous outstanding loan by issuing them a new loan! As crazy as it sounds, it helped banks to report less of their total assets as NPAs, since the new credit would cover pending instalments of the borrower’s previous loan. Then there was the issue of borrowers overleveraging, i.e. taking multiple loans using different IDs from various lenders and then failing to honour any of them. The consequence? Banks and NBFCs end up with massive NPAs. Data from credit bureaus suggests that over the last quarter, there was a 17.2% rise in the number of borrowers who had 5 or more active loans at the same time. <h2>Growth &gt; Caution</h2>It's an age-old tale unfolding yet again in India’s banking sector- Icarus flew too close to the sun and eventually, fell to its death. Between April and June 2024, NBFCs microfinance portfolio jumped by 2.7%. If you see this in terms of loan sources, microfinance loans issued by banks grew by 11.2% in Q1FY25. But the same portfolio in NBFCs swelled by almost double-23.9%. While most of these loans had an average ticket size between Rs 30,000-50,000, there was a sharp spike in the number of loans that had a ticket size of Rs 80,000 or more. Data suggests that as of March 2024, more than 12% of all microfinance borrowers had over 4 or more active loans. In dating parlance, this is a classic case of borrowers going polyamorous, minus the honesty and transparency. Not the best of situations, you'd agree! <h2>Will banks and NBFCs stand up to this stress?</h2>If their results for Q2FY25 are to be believed, NBFCs are not handling the pressure all that well. Or even slightly well. Only a few banks like Bank of Baroda (BoB), ICICI, and Indian Bank were up for the battle, even witnessing a decline in their loan delinquencies. Some others, like IndusInd Bank, saw their stock dip by a massive 16.2% over the last 5 days. Its slippages in the previous quarter burgeoned from Rs 15.3 billion in Q1FY25 to Rs 17.9 billion in Q2. As a result, the bank pushed a staggeringly high amount of money to create an NPA cushion for itself. While its management has highlighted its preference for secured lending, that was hardly reflected in its actions during the quarter, where growth in unsecured personal loans remained exceptionally high at over 7% on a QoQ basis. Turns out, only 44% of customers in IndusInd Banks’ microfinance loan portfolio were exclusive to it. The rest 47% were, you guessed it right-polyamorous! 27% had borrowed from another lender as well, apart from IndusInd Bank, while 20% were those who had outstanding loans with two other lenders, apart from IndusInd Bank. IndusInd Bank’s credit card segment did not miss the NPA bus and accounted for 7-8% of its GNPAs. Canara Bank’s total slippages during the previous quarter jumped to Rs 11.1 billion, up by 24.7% QoQ, and making up for 3.6% of its total loans. As for Bandhan Bank, its gross NPA for Q2FY25 inched up on a QoQ basis, up from 4.23% in Q1, to 4.68% in the second quarter. IDFC Bank’s heavy provisioning for its NPAs marred its profits significantly, causing its PAT (profit after tax) to dip by 73% on a YoY basis. Data from ICRA Analytics suggest that the AUM (asset under management) growth in microfinance loans and unsecured (personal and business) loans by the NBFCs will moderate to 10-12% and 19-21%, respectively, in FY2025 compared to 30% and 38%, in FY2024. Says A M Karthik, Senior Vice President &amp; Co-Group Head, Financial Sector Ratings, ICRA, “As bank funds constitute a larger share in the overall funding of NBFCs, a slower credit flow from banks to the NBFCs will compress their AUM growth. The NBFCs in unsecured and digital lending businesses shall face a higher squeeze in funding compared to others, and the unsecured lending space will continue to be a source of stress in the near term.” There has been uninhibited growth in <keyword id="6051027" type="General" weightage="20" keywordseo="Unsecured-loan" source="Orion">unsecured loan</keyword>s, apart from just the microfinance segment. For instance, Axis Bank’s gross slippages jumped by Rs 4,443 crore, largely thanks to its unsecured business. The same is the case with Yes Bank, which saw 35–40% of its retail slippages emerging from the unsecured loan portfolio. <keyword id="6376194" type="General" weightage="20" keywordseo="kotak-mahindra" source="Orion">Kotak Mahindra</keyword> Bank was also quick to follow Yes Bank’s suit, with around 35%-40% of its slippages coming from credit cards. <h2>How is the road ahead?</h2>While RBI has just cracked its whip and served a warning at the moment, experts at Morgan Stanley believe that more changes (read regulatory lashes) are underway. Moreover, with both festive and wedding seasons underway in our country, unsecured lending might pick up momentum, much to the disdain of the calibrated approach banks have been taking towards it so far. But if the situation doesn't improve, RBI will not waste any time in becoming the typical tyrannical <keyword id="19897820" type="General" weightage="20" keywordseo="bollywood" source="keywords">Bollywood</keyword> headmaster who runs his dominion with an iron fist. However, that's a story for another day. Do you have a topic in mind you'd want a simpler explanation for, or insights or personal experience to share on personal finance and more? Contact us at businessinsider@timesinternet.in.

Simply Put: Is the lending party over? The dangerous tango of Indian banks with microfinance and unsecured loans

<ul class="summary-list"><li>I had massive student loan debt due to a combination of low teacher pay and accumulating interest.</li><li>Thanks to recent changes to student loan repayment programs, my $370,000 in loan debt was forgiven.</li></ul>This spring, I received some of the best news of my life: My $370,000 in <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-borrowers-debt-cancellation-new-bankruptcy-guidance-justice-education-2024-7">student loan debt</a> was forgiven.For over a decade, my loans were an albatross. The amount of debt I owed was so massive that I felt nauseated every time I looked at my balance. I had no idea how I'd ever pay off that much money, and the burden of making payments on my meager <a target="_blank" class="" href="https://www.businessinsider.com/teacher-salary-in-every-state-2018-4">teacher's income</a> was a constant struggle.I got some relief when the COVID-19 pandemic brought a yearslong, <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/credit-cards/best-zero-apr-business-credit-cards">interest-free payment</a> pause. But I knew that would end at some point. I couldn't stick my head in the sand forever.Fortunately, the US Department of Education made some changes to <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-forgiveness-which-borrowers-are-eligible-debt-relief-plan-2024-8">student loan repayment</a>, and the day came when my debt was forgiven. I finally felt free.<h2 id="dec5f22e-a7a7-44c7-b9e9-00344d1d7895">How I got into this much debt</h2>Between my undergrad studies and my combined MA/Ph.D. program, I borrowed about $238,000. This was a massive amount on its own — but not unheard of for 10 years of <a target="_blank" class="" href="https://www.businessinsider.com/student-at-nyu-stern-found-supportive-community-2023-11">higher education</a>.Teaching wasn't always on my radar. I graduated with a BA in criminal justice and political science, but by graduation, I knew I no longer wanted to work in that field. So, I took a short detour through law school, but that wasn't for me either.While trying to figure out my next steps, I got a job as a <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/earning-extra-money-holiday-expenses-substitute-teaching-2023-11">substitute teacher</a>. That was when I discovered a passion for teaching.Subbing also taught me I had no interest in managing behavior. But teaching college meant I'd be teaching adults, so I shouldn't have to worry about classroom management. Even better, it also meant pursuing my love of research and writing. But becoming a full-time professor typically required a Ph.D., so it was back to school for me.Unfortunately, I had no idea until well after I graduated how difficult it is to land a professorship. Thanks to an <a target="_blank" class="" href="https://www.businessinsider.com/jobs-report-labor-market-hiring-layoffs-quits-recession-sahm-rule-2024-8">oversaturated job market</a>, only a tiny fraction of those who earn doctorates to become professors ever get to be one.But I didn't learn this until after I'd borrowed multiple six figures to get an education for a job I'd never have. I spent most of my academic career as an adjunct lecturer, working at multiple schools to earn barely above <a target="_blank" class="" href="https://www.businessinsider.com/jobs-labor-market-federal-minimum-wage-raise-small-business-2024-8">minimum wage</a>.Meanwhile, I enrolled my student loans in an income-driven repayment plan. As a poorly paid adjunct, my <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/student-loans/how-to-apply-for-income-driven-repayment-student-loans">income-based payments</a> were lower than the interest due on my loans, which at one point amounted to as much as $2,000 a month. Thus, my loans ballooned during the decade after my graduation, accruing $132,000 in interest.<h2 id="a8ad8373-d088-4303-9785-4c39c0d8c0e8">The role of luck</h2>I didn't think I'd ever be able to climb out of that much debt, especially since it wasn't fixed debt like a mortgage or a car loan. Instead, thanks to negative amortization, which happens when you pay less than the amount of interest due, my loans continued to grow despite making payments.Additionally, as an adjunct, I didn't qualify for <a target="_blank" class="" href="https://www.businessinsider.com/student-loan-forgiveness-borrowers-debt-cancellation-pslf-back-processing-applications-2024-7">Public Service Loan Forgiveness</a>, which comes with a shorter repayment term and tax-free forgiveness. Even though adjuncts often work 60-plus hours a week, adjunct hours were reported as classroom hours and didn't include all the additional time spent on class prep and grading.But new fixes to the student loan system eliminated these barriers for me. For one, the new income-driven SAVE plan eliminates negative amortization, which means borrowers' loans won't grow if their payments are less than the interest due.Additionally, the Department of Education closed the loophole for adjuncts by introducing its own method for calculating teaching hours. When I heard that news, I literally sat down and cried.Next, the temporary recount meant that the years I'd spent in <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/are-we-in-a-recession">economic hardship</a> deferment would count toward my total number of required payments.Because of all these changes, I received a letter in the spring of 2024 announcing, "Congratulations! Your loans are forgiven." It felt like I'd won the lottery.<h2 id="2c77dc5f-5a7f-4ef6-a9a4-ce09f339afc7">You shouldn't bank on the same luck</h2>Several pieces had to fall into place for my loans to be forgiven. This included pandemic-era relief and an administration that was friendly toward student loan forgiveness.As an English teacher and the director of the writing center at a small <a target="_blank" class="" href="https://www.businessinsider.com/the-kings-college-financial-troubles-small-christian-college-2023-3">liberal arts college,</a> I work with students who borrow six figures or more to get an education. I feel for them, as college has become prohibitively expensive, and student loans help keep college accessible.Yet student loan debt can become a huge financial burden that impacts students' ability to do things like buy a home, have children, or build savings. Certainly, if I had the chance to do it all over again, I would have made different choices, and I hope my students do too.

I was drowning in $370,000 of student loan debt with my salary as a teacher. Then, it was all forgiven.

<ul class="summary-list"><li>A millennial wanted to boost his income to help pay down his <keyword id="1737245" type="General" weightage="20" keywordseo="student-debt" source="Orion">student debt</keyword>, which was over $100,000. </li><li>He began secretly working a second remote job and doubled his annual income. </li></ul>In January 2023, Adam was making about $85,000 a year and had roughly $118,000 in <a target="_blank" href="https://www.businessinsider.com/how-much-student-debt-has-biden-canceled-loan-forgiveness-relief-2024-3">student loan debt</a>. But, by the end of the year, he'd <a target="_blank" href="https://www.businessinsider.com/working-3-full-time-remote-jobs-overemployment-reddit-millennial-debt-2024-1">doubled his annual income</a> to over $170,000, according to documents viewed by Business Insider. This made it possible for him to reduce his loan balance by over $50,000 — he has about $65,000 left in student debt as of March, he told BI via email. What changed for Adam? He started "<a target="_blank" href="https://www.businessinsider.com/double-dipping-work-multiple-remote-jobs-is-okay-2023-11">double dipping</a>." In 2022, Adam, who is in his early 40s and based in Arizona, was working remotely as a full-time security risk professional. To supplement his income and pay down debt, he said he drove for <a target="_blank" href="https://www.businessinsider.com/how-make-money-uber-eats-doordash-driving-delivery-tips-college-2024-1">food delivery services</a> like DoorDash. But midway through the year, Adam said it became clear to him that gig driving was <a target="_blank" href="https://www.businessinsider.com/how-make-money-gig-worker-uber-lyft-doordash-delivery-driver-2023-12">less profitable than it used to be</a> — so he began to consider other sources of income. That December, he stumbled upon a YouTube <a target="_blank" href="https://www.youtube.com/watch?v=clqUs5ZAUEU">video</a> that provided him with the idea he'd been looking for: He could try to secretly <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-worker-jobs-tech-layoffs-savings-credit-card-debt-2024-2">juggle multiple remote jobs</a> simultaneously. "I immediately knew that I could do this," said Adam, whose identity is known to BI but has been withheld because of his fear of professional repercussions. When he began looking for a second remote role, his two main goals were to double his income and, by doing so, pay off his <keyword id="35522" type="General" weightage="100" keywordseo="student-loans" source="Orion">student loans</keyword> within two years. By February 2023, he'd started a second full-time remote gig that paid $55 an hour. Adam said he's on track to make about $200,000 this year across the two jobs. As for his student debt, his repayment goal is right on schedule. "I'm expecting to have all my student loans paid off before Christmas," he said. Adam is among a niche group of "overemployed" Americans secretly working multiple jobs. Many are boasting <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-jobs-workers-millennials-tech-overemployment-retirement-savings-2024-2">six-figure incomes</a> and clinging to to fully-remote roles that have become <a target="_blank" href="https://economicgraph.linkedin.com/content/dam/me/economicgraph/en-us/PDF/global-state-of-remote-and-hybrid-work.pdf">very competitive</a> in recent years. These people have used their extra earnings to pay off debt, plan for early retirement, take <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-florida-worker-tech-jobs-cruise-side-hustle-advice-2024-2">lavish vacations</a>, and afford <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-california-cost-mounjaro-zepbound-without-insurance-weight-loss-2024-3">weight-loss drugs</a>. While some employers may be OK with their workers <a target="_blank" href="https://www.businessinsider.com/how-managers-react-employee-working-two-full-time-jobs-2022-7">taking on another role</a>, being caught doing so without approval could be a <a target="_blank" href="https://www.businessinsider.com/ceo-viral-linkedin-post-engineers-working-two-jobs-overemployment-theft-2022-10">fireable offense</a>. The Arizona millennial is also among <a target="_blank" href="https://www.businessinsider.com/typical-student-loan-borrower-balance-millennial-woman-debt-relief-biden-2023-11">millions of Americans</a> with student loan debt. The average American consumer with student loans had a <a target="_blank" href="https://www.businessinsider.com/personal-finance/average-american-debt">debt balance</a> of roughly $39,000 as of the third quarter of last year, per Experian data. <h2>How to succeed as an overemployed worker</h2>Adam said that roughly 70% of his student loan debt was related to his undergraduate education. The rest came from graduate school — which he started right after undergrad and didn't ultimately finish. "I don't necessarily regret taking out the debt because it did help open more opportunities," he said. "I do regret being reckless and having poor money management skills." When Adam began searching for a second remote job, he said he got lucky. "A recruiter contacted me on LinkedIn about a role that I seemed qualified for based on my profile," he said. "Within two weeks, I applied, had two interviews, and was offered the position." In addition to paying down his student loans, Adam said overemployment has made it possible for him to max out his 401(k), boost his credit score to nearly 800, have a four-month emergency savings fund, and even help out a few friends financially. Adam said he typically works between 30 and 60 hours a week across the two jobs and that his workload feels sustainable. He has several <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-jobs-tech-full-time-bosses-work-savings-advice-2024-1">tips for overemployed workers</a>, including that they should align their work calendars. "If you have regular meetings at one job, make sure to block out those times in the other calendar and vice versa," he said. Don't take on too much work — and don't get it done too quickly, he added. "Spread your work out and find a balance between being efficient and quick," he said. "Don't try to always be the hero and take on more work all the time." Adam said he's never come close to having his job-juggling exposed because his bosses trust he will get his work done on time and ask for help if it's needed. Lastly, he said overemployed workers should use their <a target="_blank" href="https://www.businessinsider.com/should-i-take-sick-day-working-from-home-pto-burnout-2022-10">sick days</a> if they start feeling overwhelmed. "You can use your sick time for many reasons — didn't get enough rest, mental health day, doctor's appointment, etc.," he said. "You don't need to justify to anyone why you are using your sick days." Going forward, Adam said he plans to keep both jobs at least until he pays off all his student loans and his net worth reaches $100,000. He said he'd consider taking a third job if it was part-time, but that he's not actively searching for one. In part, that's because he's spending any extra time he has pursuing additional cybersecurity certifications, which he said are much more affordable than undergrad and grad school. While some companies have called employees <a target="_blank" href="https://www.businessinsider.com/rto-mandates-creating-huge-disruption-in-workers-lives-experts-2024-2">back to the office</a> at least a few days a week, Adam said he's not concerned about his employers doing this. "Both have mentioned that fewer people come into the office now and production is better, so I don't see that changing anytime soon," he said. "If that status changes, I would be in a bind." Are you working multiple remote jobs at the same time and willing to provide details about your pay and schedule? If so, reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>.

A millennial who made $170,000 secretly working two remote jobs says it helped him pay off about $50,000 in student loans

<ul class="summary-list"><li>Axos Financial fell as much as 15% on Tuesday after Hindenburg Research announced a short position.</li><li>The short bet stems from Axos' large exposure to commercial real estate.</li></ul>Shares of <a href="https://markets.businessinsider.com/stocks/ax-stock">Axos Financial</a> dove as much as 15% on Tuesday after short seller Hindenburg Research announced a bet against the California-based bank.In a <a href="https://hindenburgresearch.com/axos/" target="_blank" rel="noopener">note</a>, the research firm outlined that it's taken a short position in the lender, citing Axos' rising exposure to commercial real estate. Despite brewing uncertainty in the sector, the bank has been building a portfolio around it, the report said."Contrary to many peers who backed away from the deteriorating commercial real estate market post-covid pandemic, Axos doubled down, increasing its total exposure from $5.5 billion in March 2021 to $9.9 billion in March 2024," Hindenburg said. "Now, 53% of Axos' total loan book is exposed to these segments."Between higher interest rates and a declining demand for office properties, analysts are waiting for a loan crisis to eventually swamp the real estate market. With over <a href="https://www.businessinsider.com/office-commercial-real-estate-crash-price-correction-debt-morgan-stanley-2024-2">$2 trillion in debt coming due in the next few years</a>, lenders have been shrinking their exposure to the space — <a href="https://www.businessinsider.com/banks-commercial-real-estate-loan-sales-debt-interest-rates-2024-1">sometimes at a loss</a>.To compare with Axos, the noted cited that the average direct commercial real estate exposure among regional banks is 16.5% on loan books.But not only has Axos increased its position, the bank trades at a 35% price to tangible book value premium to its peers, Hindenburg said. That implies outsized growth, a low-risk loan book, and years of upside ahead of it, the note argued.But instead, Hindenburg's research "indicates a company exposed to the riskiest asset classes with lax underwriting standards and a loan book filled with multiple glaring problems," it said. According to sources who spoke with Hindenburg, issues include a client base of doubtful and non-performing borrowers.Through a Securities and Exchange Commission <a href="https://investors.axosfinancial.com/sec-filings/documents/default.aspx" target="_blank" rel="noopener noreferrer">filing</a> published Tuesday, Axos challenged Hindenburg's report as inaccurate and misleading.Among criticisms was a failure to mention fund partners backing Axos' credit position, it said, "as well as inaccurate discussions of loans that that have already been repaid but not represented in the report as having been repaid."CEO Greg Garrabrants also previously told <a href="https://www.bloomberg.com/news/articles/2024-02-02/trump-tower-lender-calls-fear-of-bank-property-turmoil-overblown" target="_blank" rel="noopener">Bloomberg</a> that commercial real estate fears are overdone, and the risk is already reflected by Axos' stock price.Though not mentioned in the report, among the bank's former borrowers are president Donald Trump. Axos has previously refinanced a <a href="https://www.bloomberg.com/news/articles/2022-03-09/trump-scores-a-new-100-million-loan-for-flagship-new-york-tower" target="_blank" rel="noopener">$100 million loan on Trump Tower</a>, and lent funds to a Florida resort.

Trump lender Axos plunges 15% after short-seller report flags real-estate loan risk

<ul class="summary-list"><li>The Education Department told borrowers they will begin to see "improvements" to loan servicing.</li><li>The updates include streamlined website branding and an easier log-in process for repayment.</li></ul>Millions of student-loan borrowers might soon see improvements to the platforms they use to pay off their debt.Over the past few days, President Joe Biden's Education Department sent emails to federal borrowers informing them of "a new loan servicing environment" that includes updates to improve data security and scam detection, according to a copy of the email reviewed by Business Insider.Federal Student Aid also posted an <a target="_blank" href="https://studentaid.gov/announcements-events/streamlining-loan-web-experience?utm_source=mcp&amp;utm_medium=email&amp;utm_campaign=camp_1099">announcement</a> on its website with further details on the platform changes. Specifically, the first few changes beginning in March will streamline all federal servicer websites and email addresses to end in ".gov," along with an update to each servicer's website to include branding for the Federal Student Aid office. This is likely an effort to prevent scams by making it clear to borrowers that the servicer works with the federal government.Additionally, Federal Student Aid said it'll implement a new log-in process for borrowers "later in 2024" to allow them to use their studentaid.gov username and password to log into their servicer's website as well, eliminating the need for multiple log-in credentials. It'll ensure that borrowers can detect whether information is coming from an Education Department website to protect them from scams and reduce disruptions across servicing platforms."You will see more improvements when managing and repaying your loans in the coming year," the email to borrowers said.The guidance noted that some borrowers who are managed by federal servicer MOHELA will not see any of these changes until this summer because the company is <a target="_blank" href="https://www.businessinsider.com/student-loan-company-mohela-new-online-platform-borrowers-payment-delays-2023-10">moving its borrowers' accounts to a new servicing platform</a> — a process that likely won't be completed until the summer.These updates come as some borrowers continue struggling with the return to payment. Borrowers began receiving bills in October after an over three-year payment pause, and many of them have <a target="_blank" href="https://www.businessinsider.com/student-loan-bills-are-wrong-borrowers-servicers-fixing-errors-education-2023-11">encountered challenges managing the transition</a> — facing issues like inaccurate billing statements and technical errors that <a target="_blank" href="https://www.businessinsider.com/student-loan-company-website-call-center-shut-down-borrowers-payments-2023-8">prevented them from even logging into their servicer's website</a> to make payments.The Education Department has vowed to bolster oversight over servicers, <a target="_blank" href="https://www.businessinsider.com/student-loan-borrowers-bad-customer-service-education-department-oversight-repayment-2023-11">releasing an accountability framework</a> at the end of December that outlined how it would ensure servicers are fulfilling their contractual obligations.The department has also previously released guidance on preventing scams in the federal student-loan servicing industry, clarifying that repayment assistance from the government will always be free, and borrowers should not pay a company to receive help with the department's forgiveness or repayment programs.

Student-loan borrowers will start to see 'improvements' to the repayment process starting this month

<ul class="summary-list"><li>Columbia graduate student Gerardo Rios Garcia lives in a van for financial security and adventure.</li><li>He drove his van from Mexico to NYC and sleeps in it while balancing school and multiple jobs.</li></ul>I'm a 26-year-old graduate student at Columbia University and an intern at the United Nations who lives in a vintage Volkswagen van in Manhattan. I made this choice driven by a goal for future <a target="_blank" href="https://www.businessinsider.com/gen-z-wealth-financial-security-quality-of-life-2023-8">financial security</a> and a thirst for adventure.My journey into <a target="_blank" href="https://www.businessinsider.com/van-life-road-trip-convinced-nomadic-lifestyle-is-for-me-2024-3">van life</a> began when I was a kid, listening to my grandpa's stories about <a target="_blank" href="https://www.businessinsider.com/road-trip-packing-list-tips-for-smooth-ride-2023-6">road trips</a> around Mexico and the US. During my junior year of college that same van my grandpa had driven was passed down to me.Though it was no longer in the best condition — plagued with rust, brake issues, electrical malfunctions, and motor problems — I decided to renovate it.<div type="image" title="the inside of a beat up van" height="2268" width="3024" msid="111229059" hostid="261" sizebytes="505964"></div><h2 id="00708df5-a7eb-4a36-add5-10a1ae91bb99">I got into Columbia University for graduate school, and my van was the most affordable and fun way to go</h2>After completing my undergrad degree in business, I knew I wanted to continue my studies. I had no idea where to go, other than it had to be in North America, so I could take my van with me. I also wanted to avoid <a target="_blank" href="https://www.businessinsider.com/student-loan-consolidation-deadline-extended-more-time-borrowers-debt-relief-2024-5">taking out loans</a> or asking my family for financial support.I applied and was accepted to Columbia University's MS in sustainability management program. After working full time in <a target="_blank" href="https://www.businessinsider.com/day-in-life-consultant-mid-20s-great-job-recent-grad-2024-6">consulting</a> in Mexico for two years, saving as much as possible, and selling or donating everything that wouldn't fit into my van, I set out to drive to my graduate program.After crossing the border in Arizona, I had 2,500 miles and 10 states to cover. I experienced engine issues in Albuquerque, Kansas City, and Indianapolis, and I had to tow the van with a U-Haul at one point. Still, I made it to NYC on a Sunday morning and had orientation on Monday. My Volkswagen van became my home in September.<div type="image" title="the inside of a van that's been renovated to be a home" height="3024" width="4032" msid="111229062" hostid="261" sizebytes="923566"></div>I wanted a lifestyle that allowed me to focus on my studies and work to secure a good professional standing while living life to the fullest and gaining as many new experiences as possible. The van was a solution that was both economically viable and incredibly liberating.<h2 id="4bf944c0-acb5-4270-a562-d6b23d0b4dbf">Living in a van in Manhattan is hard, scary, and stressful</h2><div type="image" title="a blue van parked in New York" height="2268" width="3024" msid="111229056" hostid="261" sizebytes="371622"></div>At just over 46 square feet, my van poses significant challenges. I must constantly find free street parking, deal with extreme temperatures, and stay aware of my surroundings. I use the WiFi at coffee shops, libraries, restaurants, or the gym. I also typically shower at the gym.I have a mini fridge, an electric stove powered by a solar panel, and basic cooking utensils, so I cook sometimes. I also frequent diners, Columbia's dining halls, and coffee shops for meals.I have friends over from time to time, but because the space is small, it's not something I do very often. My mom visited me a few months ago when the weather was nice for a week, and she stayed with me in the van.<h2 id="9ca04337-b8c3-446e-b4f6-5dcf6d8fc0b3">I'm more involved in my community</h2>A small living space has encouraged me to become more engaged in my community and vastly increased my productivity. Balancing <a target="_blank" href="https://www.businessinsider.com/working-3-full-time-remote-jobs-overemployment-reddit-millennial-debt-2024-1">three part-time jobs</a> — a teaching assistant position, a research assistant role, and my internship at the UN — while joining student clubs, volunteering, and maintaining a 4.0 GPA has been feasible because I don't feel the need to always be at home.I study in the van when the weather permits, watch movies, and take naps. During the coldest months of winter and hottest parts of summer, I mainly just sleep in it.<div type="image" title="a bed inside a van" height="2268" width="3024" msid="111229069" hostid="261" sizebytes="514408"></div>My unconventional lifestyle has become a talking point. Colleagues and professors find my story intriguing. In the professional world, I've encountered a range of reactions, from admiration and curiosity to skepticism and judgment. These interactions have taught me valuable lessons in communication, resilience, and growth.<h2 id="ef72ff17-5a18-49f7-a4fd-295c5a08dbbd">I've learned how to prioritize what's truly important</h2>I now know that I want a <a target="_blank" href="https://www.businessinsider.com/minimalism-sold-my-home-possessions-stuff-downsized-simplify-life-2023-3">minimalist lifestyle</a> focused on my goals and passions, free from the distractions of excessive materialism.<a target="_blank" href="https://www.businessinsider.com/millennials-retiring-early-fire-movement-financial-independence-millionaire-savings-work-2024-5">Financial independence</a> is another significant benefit of my van life. I save around $2,000 each month and avoid student loans. This freedom gives me the cushion to explore the culinary richness of NYC, play sports, attend events, and do other activities that I wouldn't be able to do otherwise.<h2 id="2e3075e3-d7fa-46af-8c4b-495d3677d7a9">Van life has been an incredible journey of self-discovery and growth</h2><div type="image" title="a blue van parked in NYC" height="963" width="1284" msid="111229065" hostid="261" sizebytes="179394"></div><a target="_blank" href="https://www.businessinsider.com/tried-van-life-2-weeks-cheaper-than-denver-life-2024-3">Van life</a> has shown me there are endless possibilities when you choose to live authentically and embrace the unknown, but the uncertainty is the biggest challenge of this lifestyle. Not having a comfortable place to retreat and dealing with added stress can be challenging.Materially, there's limited space, and being essentially homeless can be taxing on relationships. There's also the constant concern of potential break-ins and mechanical issues. However, I truly believe living in a van has positively impacted my professional and academic life.I want my story to be a reminder that there are many ways to live and thrive. I like to think that my van, parked amid the urban chaos, stands as a symbol of resilience, creativity, and the enduring human spirit.I finish my courses in December and plan to stay in the van until then. I don't intend to live in my van for an extended period after finishing school, but I haven't decided on my next steps. I'm open to exploring different opportunities and locations.

I live rent-free in NYC. Moving into a van has allowed me to save, avoid taking out loans, and live a life of adventure.

FHA loans: Requirements, pros and cons, and how to get one

<ul class="summary-list"><li>Billionaire Don Hankey's company underwrote a $175 million appeal bond for Donald Trump.</li><li>Hankey's net worth is estimated at $7.4 billion and he oversees a $22.5 billion automotive empire.</li></ul>Billionaire Don Hankey swooped in on Monday and underwrote a $175 million <a target="_blank" href="https://www.businessinsider.com/donald-trump-posts-bond-after-court-reduction-2024-4">appeal bond for Donald Trump</a>, saving the former president from getting his assets sold out from under him while he appeals his civil fraud case.The 80-year-old oversees Hankey Group, which employs over 3,400 people and whose assets are worth around $22.5 billion, per <a target="_blank" href="https://www.forbes.com/profile/don-hankey/?sh=2ba84a081783">Forbes</a>. The empire consists of eight companies in the automotive, finance, technology, real estate, and insurance industries.Hankey's Knight Specialty Insurance provided Trump's bond on Monday, three days before deadline.It's not the first time Hankey has been financially tied to an entity that's helped Trump out of a potential bind, although the businessman told Bloomberg he didn't do it for political reasons."Yes, I voted for him in the past, but this is a business deal and this is what we do," Hankey said in an <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-02/trump-175-million-bond-arranged-by-billionaire-supporter-s-firm">interview</a> with Bloomberg about the $175 million bond. "I have never met Donald Trump, nor talked to him on the phone."Hankey told the publication that he has also invested in Axos Bank, which <a target="_blank" href="https://www.businessinsider.com/donald-trump-100-million-loan-trump-tower-bank-ceo-donor-2022-3">refinanced Trump Tower in 2022 </a>for $100 million after the previous loan for that amount had been placed on a debt watch list — but that his Axos Bank investment had nothing to do with Trump's bond. Axos Bank CEO Greg Garrabrants has previously donated around $50,000 to Republican campaigns since 2012, with $9,600 in support of Trump, according to <a target="_blank" href="https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=Gregory+Garrabrants&amp;max_date=12%2F31%2F2022">Federal elections records</a>.Hankey's net worth is estimated at $7.4 billion, according to <a target="_blank" href="https://www.forbes.com/profile/don-hankey/?sh=2ba84a081783">Forbes</a> — and it's nearly doubled within the last three years.Hankey grew up a lot worker, washing and polishing cars, and later held a job as a salesman at his father's Ford dealership, which he fully acquired in 1972 and built his empire from, Bloomberg reported.Dubbed the "little-known king of subprime car loans" in his Forbes profile, his largest venture, Westlake Financial Services, operates as a subprime financing company and is <a target="_blank" href="https://www.hankeygroup.com/companies/">worth</a> $16.8 billion in assets, according to the Hankey Group website. Westlake collaborates with car dealerships nationwide to offer loans to people with poor or nonexistent credit.The group also owns a real estate firm, Hankey Investment Company LP. The company owns 488,343 square feet of commercial property and 12 million square feet of urban development land in Southern California, according to the Hankey Group website.The billionaire generated buzz two years ago when he poured a reported $82.5 in financing into Bel Air megamansion <a target="_blank" href="https://www.businessinsider.com/photos-225-million-mansion-the-one-biggest-modern-home-us-2021-9">"The One," developed by Nile Niami</a>. The 105,000-square-foot property contains 21 bedrooms and 42 full bathrooms. It also includes a 4,000-square-foot guesthouse and a long list of luxury amenities including multiple infinity pools, a nightclub, a spa, a beauty salon, a bowling alley, and a movie theater.<div type="image" title="Aerial view of Bel Air Los Angeles neighborhood with mansions and golf course." height="2002" width="3000" msid="108984506" hostid="261" sizebytes="1092766"></div>However, a lack of interest in the property led to financial issues for its developer, Nial Niami's Crestlloyd, which filed for bankruptcy protection. The <a target="_blank" href="https://www.businessinsider.com/500-million-bel-air-unfinished-mega-mansion-2021-9">mansion ended up auctioning</a> for less than half of its expected $500 million worth.Hankey became involved in some of the legal challenges over the property's ownership, but said he got all his capital commitments back after the property <a target="_blank" href="https://labusinessjournal.com/special-editions/wealthiest-angelenos/wealthiest-2023/7-don-hankey-2/">sold</a>, the Los Angeles Business Journal reported.<div type="image" title="&quot;The One&quot; mansion Bel Air" height="2929" width="4500" msid="108984507" hostid="261" sizebytes="1267994"></div>Hankey attended the University of Southern California and currently resides in Malibu.He has been married for 40 years to Debbie Hankey and has four children, <a target="_blank" href="https://www.forbes.com/profile/don-hankey/?sh=b177b3c17839">according to Forbes</a>.

Meet the billionaire 'king of subprime car loans' whose company underwrote Trump's $175 million civil fraud bond

<ul class="summary-list"><li>Delinquencies of loans backing CMBS have spiked, with the troubled office sector to blame. </li><li>Trouble for CMBS bonds is a greater concern than banks' CRE exposure, David Rosenberg said. </li></ul>Markets have been fretting over regional banks' exposure to troubled commercial real estate debt in recent months, but a bigger problem may be lurking in another corner of the property market. Delinquencies for commercial mortgage-backed securities — bonds backed by loans on commercial properties — have spiked over the last year, with the office sector shouldering the blame as delinquency rates for office loans more than tripled since the start of 2023, David Rosenberg, president of Rosenberg Research, said in a note on Thursday. Office values in major markets like San Francisco, Los Angeles, and New York have plunged due to rising vacancy rates driven by work-from-home dynamics. The influx of riskier interest-only loans that back CMBS has left holders exposed to this sharp decline in commercial property values, Rosenberg noted. "While equity investors get sucked into the AI mania, there are real signs of stress in the economy, and this is just one of them. When everything looks perfect, it takes one event to burst the bubble, and multiple data points highlight that this is where the next contagion may be brewing," Rosenberg said. Major US banks have been <a href="https://www.businessinsider.com/commercial-real-estate-delinquent-loans-bank-reserves-office-values-economy-2024-2">grappling with a surge in commercial mortgages over 30 days late</a>, with total delinquencies on the debt surpassing reserves set aside to deal with loan losses.Yet, Rosenberg notes that the CMBS market is the bigger problem, as investors are exposed directly to falling property values and poor loan performance. The total CMBS delinquency rate has risen from 2.94% in January 2023, to 4.66% in January this year. Even more stark has been the rise in the delinquency rate on office debt backing the bonds, which has gone from 1.86% to 6.3% in a year. "This just goes to show that the scale of the problem, and what we are seeing so far in increased provisions by banks may just be the tip of the iceberg. The wave of CMBS defaults may be the next domino to fall for investors," Rosenberg added.

Bonds backed by commercial real estate loans could be the next pain point for markets, economist says

<ul class="summary-list"><li>A Florida-based Gen Xer made over $300,000 in 2023 secretly working multiple remote tech jobs. </li><li>While the extra income has allowed him to travel more, he still feels "far from rich," he said.</li></ul>In 2021, Robert was making roughly $180,000 a year from his <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-work-tech-career-advancement-side-hustle-florida-2024-3">tech job</a>, but when his workflow slowed, he feared a layoff may be coming soon.He decided to start looking for another role and eventually found one that paid $190,000 a year, he previously <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-florida-worker-tech-jobs-cruise-side-hustle-advice-2024-2">told Business Insider</a> via email. But before he resigned from his current job, he recalled hearing about a former coworker who was making several hundred thousand dollars secretly working two jobs.After thinking it over, Robert decided to try to <a target="_blank" href="https://www.businessinsider.com/working-multiple-remote-jobs-dont-feel-guilty-overemployed-secret-jobs-2024-2">juggle both roles</a> at the same time. That choice changed his life.In 2023, Robert earned over $300,000 across multiple remote roles, according to documents viewed by BI. He said the extra income allowed his partner to quit their job and made it possible for him to take several expensive vacations, including a roughly $20,000 cruise.The Gen Xer, a Florida resident, is among the "<a target="_blank" href="https://www.businessinsider.com/overemployed-workers-secret-two-multiple-jobs-salaries-tech-tips-2023-11">overemployed</a>" Americans who are <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-jobs-tech-full-time-bosses-work-savings-advice-2024-1">secretly working multiple remote jobs</a> to boost their incomes. Over the past year, Business Insider has interviewed more than a dozen job jugglers, many of whom are in the IT and tech industries, who've used the extra money to <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-worker-student-loan-debt-arizona-millennial-side-hustle-2024-4">pay off debt</a>, <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-jobs-retirement-worker-tech-career-savings-productivity-home-2023-12">save for retirement</a>, and afford <a target="_blank" href="https://www.businessinsider.com/overemployed-remote-california-cost-mounjaro-zepbound-without-insurance-weight-loss-2024-3">weight-loss drugs</a>. While some employers <a target="_blank" href="https://www.businessinsider.com/how-managers-react-employee-working-two-full-time-jobs-2022-7">may be fine</a> with their workers having a second job, doing so without company approval could have repercussions if a worker is <a target="_blank" href="https://www.businessinsider.com/ceo-viral-linkedin-post-engineers-working-two-jobs-overemployment-theft-2022-10">found out</a>.For Robert, the income from multiple jobs decision has made it possible for him to travel more. Over the last few years, he estimates he spent between $28,000 and $35,000 in total annual travel expenses. Some of his recent trips included Yellowstone, the <a target="_blank" href="https://www.businessinsider.com/what-to-do-on-the-galpagos-islands-according-to-frequent-visitor">Galápagos Islands</a>, and Las Vegas."We now spend a lot more time on vacations," he said. "We spend a lot on travel because life is more about experiences and memories than material things."Still, Robert considers himself to be "far from rich," in part because it takes more than a couple of years with a higher income to ensure financial security in the long term, he said. He experienced several job separations in the past, so he knows his jobs aren't guaranteed to last. Additionally, he said he made some bad decisions when he was younger that set back his finances."We don't live an extravagant life by any means," he said.Robert shared how earning more has impacted his relationships with his partner and family — and how he's spending the money.<h2>The extra income goes to travel, food, home, and family</h2>Robert said making more money hasn't changed his relationship with his partner much. But it has been good for his relationships with his family, as it's made it possible for him to visit them more often.He said it's also allowed him to provide some family members with financial support — he estimated that he spends about $5,000 to $6,000 a year helping out relatives. But finding the right balance can be tricky."I am careful with that because I know financial help to some actually is a disservice and prevents people from pushing themselves to succeed," he said.Aside from family and travel, Robert said he spends most of his money on food and his home.Food is something he doesn't typically budget for, but these expenses can add up, particularly when he travels, he said. On a five-day trip earlier this year, he said he spent about $700 on food, including $225 on one meal for himself and two family members. He estimated that in the typical month, he spends between $1,500 to $2,000 on food."We eat well," he said. "I grew up poor with little to no good food and that is something I do not skimp on."Robert's housing expenses include a monthly mortgage payment — he said he has about $380,000 left on his loan balance.He's also putting over $100,000 into refurbishing his home, according to documents viewed by BI. He said this money is going toward a new deck with a high-end hot tub, his basement, and an over 1000-square-foot garage, which he said will be used for two vehicles, a gym, and storage. He said he's taken out loans to fund some of this spending.Additionally, Robert said he's bought two vehicles in recent years, — both of which are mostly paid off — and that he tries to put as much money in his 401(k) account as he can.However, Robert said he's not satisfied with the state of his finances."My partner and I would like to have no debts in five years unless we invest in a vacation home for us and the family," he said. "We would also like to have $250,000 saved up in six or seven years which is separate from our retirement accounts."Are you working multiple remote jobs at the same time and willing to provide details about your pay and schedule? If so, reach out to this reporter at <a target="_blank" href="mailto:jzinkula@businessinsider.com">jzinkula@businessinsider.com</a>.

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