Home Equity Delinquencies Up Sharply

The delinquency rate on home equity loans held by commercial banks increased sharply in the first quarter, according to the American Bankers Association.The ABA's quarterly consumer credit delinquency survey showed that 2.15% of closed-end home equity loans were overdue at the end of the first quarter, up from 1.92% in the fourth quarter of 2006. Delinquencies also rose on home equity lines of credit, from 0.57% in the fourth quarter to 0.60% in the first quarter. The HELOC overdue rate remained the lowest delinquency rate for any consumer credit category tracked by the ABA. ABA chief economist James Chessen said slow job growth and falling home prices have weakened overall consumer credit. "There are still signs of consumer financial distress, which will continue throughout most of this year as the worst of the housing problem works its way through the economy," Mr. Chessen said. The ABA can be found on the Web at http://www.aba.com.