RISMEDIA, January 11, 2010—(MCT)—Overall delinquencies on consumer loans fell in the third quarter of 2009, but delinquencies on home equity loans continued to rise as unemployment and falling housing values socked borrowers, according to the latest data from the American Bankers Association.
“Housing-related loans continued to show stress. Home-equity loan delinquencies hit another record, jumping 29 basis points to 4.30% of all accounts,” the latest report from the Washington-based ABA said.
Delinquencies on home equity lines of credit also hit a new record, rising 20 basis points to 2.12% of all accounts. A basis point is one one-hundredth of a percentage point. Mobile home delinquencies increased to 3.63% of all accounts from 3.53% in the previous quarter.
However, consumer loan delinquencies fell in seven categories, marking the first time since 2007 that so many loan categories experienced declines, according to the ABA. The group’s composite ratio for installment loans fell to 3.23% of all accounts in the third quarter, down from 3.35% for the second quarter. “Delinquencies may be near their peak as job losses have slowed,” Chief Economist James Chessen said. “Consumers are working hard to get their financial houses in order by spending less, saving more and paying down debt. But there’s still a bumpy road ahead with many people unemployed and family budgets stretched to their limits,” he added.
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