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Large mortgage servicers continued to shed delinquencies as overall loan performance improved in the fourth quarter, the Office of the Comptroller of the Currency said Friday.
March 27 -
An index of late-payment rates hit a record low in the third quarter, as consumer spent less to fill their gas tanks.
January 8
U.S. homeowners continue to take advantage of rising house prices to dig themselves out of the hole created by the Great Recession.
In the second quarter, the 30-day delinquency rate on home equity lines of credit dropped to 1.34%, its lowest mark since the third quarter of 2008, according to new survey data from the American Bankers Association. Late payments were down from 1.42% in the first quarter.
Similarly, the rate of late payments on closed-end home equity loans dropped to 1.36%, which is another post-recession low. The comparable delinquency rate during the prior three months was 1.53%.
The S&P/Case Shiller index, a widely cited measure of U.S. home prices, is currently at its highest level since November 2007. The index is up 30.7% from its low-water mark of February 2012, and is only 5.2% below its peak in July 2006.
It is no coincidence that as the value of their houses rise, borrowers are doing a better job of staying current on their home equity loans, according to ABA chief economist James Chessen.
"There is a strong correlation between rising home prices and falling home-related delinquency rates," Chessen said in a press release. "As the housing market continues to gain strength, we expect home equity loan delinquencies to continue their downward trend."
Delinquency rates have been falling
Meanwhile, the 30-day delinquency rate on personal loans fell to 1.41% in the second quarter from 1.48% in the first quarter, according to the ABA. The delinquency rate on auto loans arranged through car dealers dropped to 1.45%, down from 1.58% in the first quarter.
The rate of late payments on credit cards rose slightly during the second quarter to 2.52%, up from 2.49% during the first three months of the year, as U.S. consumers are turning back to plastic.
In August 2015, revolving consumer credit reached $918 billion on a seasonally adjusted basis, according to a separate report Wednesday from the Federal Reserve. That is the highest level of revolving debt since November 2009.
The ABA's data is based on a survey of 300 banks nationwide.