The delinquency rate on home equity loan products surged in the third quarter, according to the American Bankers Association.The ABA's consumer delinquency bulletin showed that the overdue rate on closed-end home equity loans rose 29 basis points to 2.28% in the third quarter, the highest delinquency rate posted in two years. The overdue rate on home equity lines of credit climbed 7 basis points to 0.84%, though home equity lines of credit remained the consumer credit category with the lowest delinquency rate at banks. The delinquency rate on property improvement loans rose 16 basis points to 1.60% in the third quarter. Deterioration in housing-related loans drove the ABA's consumer composite delinquency ratio up during the quarter, despite improvement in credit card performance. James Chessen, chief economist of the ABA, said he expects to find that delinquency rates on home equity loan products continued to rise in the fourth quarter, "reflecting continued weakness in the housing sector." The ABA can be found on the Web at http://www.aba.com.
