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January 3, 2008
Late Payments on Consumer Loans Rise
By THE ASSOCIATED PRESS
Filed at 11:39 a.m. ET
WASHINGTON (AP) -- Late payments on a cluster of consumer loans, including
those for autos, home improvement and certain home equity loans, climbed in
the summer to their highest point since the country's last recession in
2001.
The American Bankers Association reported Thursday that the delinquency rate
on a composite of consumer loans increased to 2.44 percent in the
July-to-September quarter. That was up sharply from 2.27 percent in the
previous quarter and was the highest late-payment rate since the second
quarter of 2001, when the economy was suffering through a recession.
Payments are considered delinquent if they are 30 or more days past due. The
survey is based on information supplied by more than 300 banks nationwide.
Late payments on credit cards, meanwhile, dipped during summer.
The delinquency rate on credit cards dropped to 4.18 percent in the third
quarter, down from 4.39 percent in the second quarter.
The association's quarterly survey of consumer loans painted a mixed picture
of how people are managing their debt. It suggested that some people feel
more squeezed than others.
A severe housing slump and weaker home values have clobbered some
homeowners -- making it difficult, or even impossible for some to pay their
monthly mortgages. Foreclosures surged to record highs and more homeowners
fell behind on their payments during the third quarter of last year, the
Mortgage Bankers Association reported last month.
A drop in home prices left some people stuck with balances on their home
mortgages that eclipsed the worth of their home. Others got burned when low
introductory rates on their mortgages jumped to much higher rates, which
they couldn't afford.
''Consumer loans directly related to the housing market were hit the
hardest,'' said James Chessen, chief economist at the American Bankers
Association. ''We anticipate delinquency rates will continue to rise on
these types of loans in the fourth quarter of 2007, reflecting continued
weakness in the housing sector.''
Late payments on home equity lines of credit jumped to 0.84 percent in the
third quarter. That was up from 0.77 percent in the second quarter and was
the highest since the final quarter of 1997. The delinquency rate on
home-equity loans in the third quarter rose to 2.28 percent, a two-year
high.
Meanwhile, the delinquency rate on ''indirect'' auto loans -- which are
arranged through dealerships -- jumped in the third quarter to 2.86 percent,
a 16-year high.
Late Payments on Consumer Loans Rise
By THE ASSOCIATED PRESS
Filed at 11:39 a.m. ET
WASHINGTON (AP) -- Late payments on a cluster of consumer loans, including
those for autos, home improvement and certain home equity loans, climbed in
the summer to their highest point since the country's last recession in
2001.
The American Bankers Association reported Thursday that the delinquency rate
on a composite of consumer loans increased to 2.44 percent in the
July-to-September quarter. That was up sharply from 2.27 percent in the
previous quarter and was the highest late-payment rate since the second
quarter of 2001, when the economy was suffering through a recession.
Payments are considered delinquent if they are 30 or more days past due. The
survey is based on information supplied by more than 300 banks nationwide.
Late payments on credit cards, meanwhile, dipped during summer.
The delinquency rate on credit cards dropped to 4.18 percent in the third
quarter, down from 4.39 percent in the second quarter.
The association's quarterly survey of consumer loans painted a mixed picture
of how people are managing their debt. It suggested that some people feel
more squeezed than others.
A severe housing slump and weaker home values have clobbered some
homeowners -- making it difficult, or even impossible for some to pay their
monthly mortgages. Foreclosures surged to record highs and more homeowners
fell behind on their payments during the third quarter of last year, the
Mortgage Bankers Association reported last month.
A drop in home prices left some people stuck with balances on their home
mortgages that eclipsed the worth of their home. Others got burned when low
introductory rates on their mortgages jumped to much higher rates, which
they couldn't afford.
''Consumer loans directly related to the housing market were hit the
hardest,'' said James Chessen, chief economist at the American Bankers
Association. ''We anticipate delinquency rates will continue to rise on
these types of loans in the fourth quarter of 2007, reflecting continued
weakness in the housing sector.''
Late payments on home equity lines of credit jumped to 0.84 percent in the
third quarter. That was up from 0.77 percent in the second quarter and was
the highest since the final quarter of 1997. The delinquency rate on
home-equity loans in the third quarter rose to 2.28 percent, a two-year
high.
Meanwhile, the delinquency rate on ''indirect'' auto loans -- which are
arranged through dealerships -- jumped in the third quarter to 2.86 percent,
a 16-year high.
