Mortgage Defaults Slip Lower in December

January 18, 2011 No Comments »

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Mortgage defaults on both first and second mortgages fell in December, according to the latest S&P/Experian Consumer Credit Default Indices report released today.

The first mortgage default rate fell to 2.93 percent, down 4.34 percent from November and 38.57 percent from a year earlier.

The second mortgage default rate slipped to 1.74 percent, down 3.07 percent from November and 50.76 percent from a year ago.

Bank card and auto loan delinquencies also fell month-to-month, meaning we might actually be heading the right direction.

“Default rates across the four major categories of consumer borrowing declined in December from November and from a year earlier,” said David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P, in a release. “Nationally, consumers continue to gradually improve their financial condition.”

“Separately, data from the Federal Reserve shows that bank card credit declined through November. Debt-service ratios, the proportion of disposable income that goes to paying debt, continues to decline. On a regional basis, the five cities we cover suggest that the Sunbelt continues to see greater than typical default rates.”

Consumer credit defaults fell in Los Angeles, Chicago, Miami, and New York, but increased slightly in Dallas.

Experian’s data comes from 11,500 leading banks and mortgage lenders, covering roughly $11 trillion in outstanding loans.

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