Mortgage Defaults Fall in Experian Consumer Credit Report

Consumer credit defaults, with the exception of credit cards, fell in March for the third consecutive month S&P and Experian said on Monday.  The national Consumer Credit Default Composite Index released by the two companies declined to 1.96 percent in March from 2.09 percent the month before.

The index measuring first mortgage defaults was down to 1.88 percent from 2.02 percent in February.  This 14 basis point decline brings that index below the prior low reached last August.  The second mortgage rate was down even more, 17 basis points to 1.03 percent and auto loans fell from 1.22 percent to 1.11 percent bringing both to the lowest levels in the three year history of the report.

Bank card default rates, on the other hand, increased to 4.47 percent in March from 4.41 percent in February when it set its historic low.

 “The first quarter of 2012 was largely positive for the consumer,” says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. “Not only have we resumed the downward trend in consumer default rates that began in the spring of 2009, but we appear to be reaching new lows across most loan types. The first three months of 2012 show broad based declines in default rates with first and second mortgage, auto and composite default rates all reaching post-recession lows.

The report focuses on five metropolitan statistical areas and in four out of the five the default rate dropped and two of the five, Chicago and Miami, posted new lows.  Only LA showed a small – one basis point – increase from February’s number.

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OBAMA ADMINISTRATION RELEASES MARCH HOUSING SCORECARD

WASHINGTON- The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the March edition of the Obama Administration’s Housing Scorecard – a comprehensive report on the nation’s housing market. Data in the March Housing Scorecard show some promising signs of stability, though the overall outlook remains mixed. Mortgage delinquencies continued a downward trend and were substantially below year ago levels, while sales of existing homes in January and February marked the strongest start to a year since 2007. However, data on home prices changed little from the previous month – marking a fifth month of seasonal lows. The full report is available online at www.hud.gov/scorecard.

Default Rates Head Down Again

After four straight months of increases The S&P/Experian
Consumer Credit Default Indices
fell in January as did the four loans types
that make up the composite.  The Default
Index dropped from 2.24 percent in December to 2.16 percent in January.  In January 2011 the index was at 2.90
percent. 

Much of the decrease among the component indices was from
the first mortgage component which dropped from 2.19 percent in December to
2.08 percent in January and was down significantly from the 2.86 percent level
of one year earlier.  The default rate
for second mortgages decreased from 1.33 percent to 1.30 percent and bank cards
from 4.60 percent to 4.57 percent; those rates were 1.51 percent and 6.13
percent respectively in January, 2011. 
Auto loans were unchanged at 1.27 percent but down from 1.58 percent one
year earlier.

David M. Blitzer, Managing Director and Chairman of the
Index Committee for S&P indicates said “As we begin the New Year, consumer default
rates may be resuming the two-year downward trend that was interrupted in the
middle of last year.  Last month we
reported that the second half of 2011 saw a modest increase in consumer
defaults led by four consecutive monthly increases in first mortgage defaults.  While one month of data is not a new trend,
January’s report shows broad based declines in default rates, which is a bit of
a relief.”

The Default Indices cover five cities, three of which had
lower rates in January.  Los Angeles fell
from 2.54 percent to 2.36 percent, Chicago dropped from 2.84 percent to 2.76
percent, and Dallas from 1.56 percent from 1.53 percent.  The rate in Miami rose for the third
consecutive month and is now at 4.80 compared to 4.73 percent in December and
New York increased ten basis points to 2.23 percent.

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