Quarterly HELOC Delinquencies Drop

The 30-day-and-more past due rate on home equity lines of credit fell 8 basis points to 2.04% in the fourth quarter, the first quarter-to-quarter decline in six quarters, according to an American Bankers Association survey. The seasonally adjusted delinquency rate on closed-end home equity loans edged up only 2 bps to a record high of 4.32 in the fourth quarter. "The first sign of improvement has been a long time coming and is finally some positive indication that the housing market is stabilizing," ABA chief economist James Chessen said. The Federal Deposit Insurance Corp. reported that banks and thrifts charged-off $5.2 billion in HELOCs in the fourth quarter, which is a 3.13% net charge-off rate. Charge-offs on closed-end home equity loans totaled $2.9 billion, which is a 6.27% net charge off rate.