HEL Performance Mixed in 1Q

The performance of home equity loans at banks improved in the first quarter, while the overdue rate on home equity lines of credit increased slightly, according to the American Bankers Association.As of March 31, the home equity delinquency rate fell to 1.94% from 2.07% at the end of 2005. The past-due rate on HELOCs increased to 0.55%, up from 0.51% three months earlier. It marked the fifth consecutive increase in the overdue rate for HELOCs, though the products remained the consumer credit category with the lowest delinquency rate in the ABA's survey. Credit card delinquencies also rose in the first quarter, and ABA chief economist James Chessen said rising interest rates and weak consumer savings are taking a toll. "Not since the Great Depression has the national savings rate remained below zero for so long," he said. "Absent savings to cushion financial stress, some consumers end up missing a payment on their credit card loan." The ABA can be found online at http://www.aba.com.