Posted on Monday, 18th October 2010 by Charlotte W
Mortgage default rates fell to their lowest levels in over two years in September, amid a general decline in consumer credit defaults, according to new figures from Standard & Poor’s and Experian.
The default rate on primary mortgages declined to 3.02 percent in September, the lowest its been since May 2008, according to the S&P/Experian Consumer Credit Default Indices. Defaults on second lien mortgages fell to 2.14 percent, the lowest reading in that index since February 2007. Defaults on first-lien mortgages have declined for nine consecutive months, according to the indices. First-lien mortgage defaults peaked in May 2009 at 5.67 percent. Default rates on auto loans also fell, after increasing the previous two months, registering at 2.04 percent, down two basis points from August. Bank card defaults fell for the fifth consecutive month, but still remained elevated at 7.04 percent. Overall consumer credit defaults have been declining throughout the year, with the 3.14 percent Composite Index score down nearly one-third from the September 2009 level of 4.69 percent. On an annual basis, default rates on first- and second lien mortgages are down approximately 35 percent, while auto loan defaults are down by more than 23 percent. Bank card defaults show the smallest annual improvement, but are still down more than 13 percent over the past 12 months. The monthly consumer default report is based on data obtained by Experian from approximately 11,500 lenders and is designed to reflect the default rates of consumer loans in four major credit areas.
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