The 30-day delinquency rate on 'open end' home equity lines of credit fell 7 basis points to 1.74% in the third quarter, reaching a low not seen since 2008, according to new figures released by the American Bankers Association.
A year ago, the seasonally adjusted delinquency rate on HELOCs was 2.12% -- the highest rate since ABA began tracking such numbers in 1990.
However, the seasonally adjusted delinquency rate on closed-end home equity loans rose 8 bps to 4.05% in the third quarter from the June 30 period. A year ago, the HEL delinquency rate was 4.30%
ABA chief economist James Chessen said the jobs market "stumbled" in the third quarter with little improvement in consumer credit delinquency rates. But the economy is improving and consumers have reduced their debt levels while increasing savings. "I think we will see momentum return and delinquencies improve over the next six months," Chessen said.
Separately, the Federal Deposit Insurance Corp. reported recently that charge-offs on home equity loans are trending downward.
On HELOCs, net charge offs by banks and thrifts totaled $3.96 billion in the third quarter, down from $5.1 billion in the third quarter of 2009. The third quarter net charge-off rate was 2.43% compared to a 3.05% a year ago.
Net charge-offs on closed-end second liens totaled $1.84 billion in the third quarter, down from $2.84 billion during the same quarter in 2009. The charge-off rate from these second liens is 4.6%, compared to 5.9% a year ago.
The 30-day delinquency rate on 'open end' home equity lines of credit fell 7 basis points to 1.74% in the third quarter, reaching a low not seen since 2008, according to new figures released by the American Bankers Association.
A year ago, the seasonally adjusted delinquency rate on HELOCs was 2.12% -- the highest rate since ABA began tracking such numbers in 1990.
However, the seasonally adjusted delinquency rate on closed-end home equity loans rose 8 bps to 4.05% in the third quarter from the June 30 period. A year ago, the HEL delinquency rate was 4.30%
ABA chief economist James Chessen said the jobs market "stumbled" in the third quarter with little improvement in consumer credit delinquency rates. But the economy is improving and consumers have reduced their debt levels while increasing savings. "I think we will see momentum return and delinquencies improve over the next six months," Chessen said.
Separately, the Federal Deposit Insurance Corp. reported recently that charge-offs on home equity loans are trending downward.
On HELOCs, net charge offs by banks and thrifts totaled $3.96 billion in the third quarter, down from $5.1 billion in the third quarter of 2009.The third quarter net charge-off rate was 2.43% compared to a 3.05% a year ago.
Net charge-offs on closed-end second liens totaled $1.84 billion in the third quarter, down from $2.84 billion during the same quarter in 2009.The charge-off rate from these second liens is 4.6%, compared to 5.9% a year ago.
