Home Equity Loan Lates Decrease, HELOCs Hold Steady

October 5, 2010 No Comments »


Most consumer loan delinquencies improved during the second quarter, according to the latest Consumer Credit Delinquency Bulletin from the American Bankers Association.

The delinquency rate on closed-end home equity loans (second mortgages) fell to 3.97 percent from 4.12 percent, while delinquencies on home equity lines of credit (HELOC) remained unchanged at 1.81 percent.

Meanwhile, bank card (credit cards provided by banks) delinquencies fell from 3.88 percent to 3.62 percent during the quarter, the lowest level since the first quarter of 2001.

The 15-year average is 3.93 percent – of course, the numbers may be a little misleading because banks are writing off a lot of the debt, so it may not be reported as a delinquency.

The ABA defines a delinquency as a payment that is 30 days or more overdue.

Mobile home loan delinquencies continued to tick higher, rising to 4.01 percent from 3.65 percent, the highest rate since 2005.

The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, increased just two basis points to 3.00 percent from 2.98 percent.

The outlook at the ABA is that delinquencies will improve, albeit at a slow pace, as the economy sputters along.

– Home equity loan delinquencies decreased to 3.97 percent from 4.12 percent
– Home equity lines of credit delinquencies remained unchanged at 1.81 percent
– Mobile home loan delinquencies rose to 4.01 percent from 3.65 percent
– Property improvement loan delinquencies fell from 1.40 percent to 1.35 percent

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