HE Delinquency Rates Mixed
The delinquency rate on home-equity loans declined in the third quarter, while the overdue rate on home-equity lines of credit increased slightly, according to the American Bankers Association.
The ABA survey found that 1.79% of home-equity loans at banks were delinquent in the third quarter of 2006, down 10 basis points from the second quarter. At the same time, the overdue rate on home-equity lines of credit increased by five basis points to 0.57% in the third quarter.
HELOCs continued to have the lowest delinquency rate of any consumer credit category tracked in the ABA Consumer Credit Delinquency Bulletin.
Overall, the ABA found that late payments for most types of consumer loans rose in the third quarter of last year, with the credit card delinquency rate rising to 4.57% from 4.41% in the second quarter.
The ABA's composite ratio shows that late payments in eight types of closed-end installment loans increased by 16 basis points, making 2.12% of consumer loans delinquent in the third quarter.
The ABA also reported increases in the delinquency rate on property improvement loans (up 20 basis points to 1.68%), marine loans, auto loans and personal loans.
The delinquency rate on mobile home loans decreased to 1.79%, down 10 basis points from a day earlier.
James Chessen, chief economist of the ABA, said that consumers are still facing budget squeezes, with energy costs and the cumulative effect of increases in short-term interest rates taking a toll.
Snapshot: Bank Consumer Delinquency Rates
Loan Type 2nd Qtr '06 3rd Qtr '06
HE Loan 1.89% 1.79%
HELOC 0.52% 0.57%
Home Improvement 1.48% 1.68%
Mobile Home 3.61% 3.24%
Source: American Bankers Association (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com