Charge-Off Rates Rise

A study by BenchMark Consulting finds that while the number of consumer loan charge offs is rising, the charge-off rate by dollar volume has fallen.

That suggests lenders are charging off smaller balance consumer loans,

the company said. By dollar, the overall consumer-loan delinquency rate increased by 2% at the end of last year from a year earlier. But the average gross loss rate decreased by 13%.

Brian King, BenchMark's consumer lending and mortgage banking practice manager, said lenders should examine peer efforts to help identify ways to identify successful collection strategies.

"Foreclosures are increasing, rates are rising, and the origination market is shrinking. This environment has financial organizations looking for ways to maximize efficiencies," he said in a news release. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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