Quarterly performance on home-equity products owned by banks worsened, and year-over-year performance wasn’t much better. But other consumer lending categories supported an overall improvement in delinquency.
The rate of payments on bank-held home-equity loans that were past due at least 30 days was 4.20 percent in the third quarter.
Closed-end HEL delinquency deteriorated from the second quarter, when the 30-day rate was 4.09 percent. The rate was also worse than in the third-quarter 2011, when HEL delinquency was 4.12 percent.
The statistics were spelled out Thursday in the American Bankers Association’s Consumer Credit Delinquency Bulletin.
Also rising was 30-day delinquency on home-equity lines of credit. Third-quarter HELOC delinquency was 1.93 percent, 2 basis points worse than three months earlier and unchanged from a year earlier.
“While there are strong signs that the housing market has turned a corner, it will take several quarters before delinquency numbers begin to reflect those trends,” ABA Chief Economist James Chessen stated in the report.
Even late payments on mobile home loans moved higher, lunging to 3.51 percent from the second quarter’s 3.15 percent. But mobile home delinquency was down from 4.08 percent at the same point in 2011.
One real estate related category, however, showed improvement: property improvement loans. The 30-day rate on such loans slipped 1 basis point from the prior period to 0.89 percent. Property improvement loan delinquency has improved 7 BPS over the past year.
ABA’s composite index, which reflects multiple categories of consumer credit, indicated that the 30-day delinquency rate was 2.16 percent.
The composite index improved from 2.24 percent as of June 30, 2012, and 2.59 percent as of Sept. 30, 2011.
“Consumers are paying close attention to their finances as they continue to pay down debt in an uncertain economy,” Chessen said. “The conservative approach consumers have taken to credit over the last several years has allowed them to better manage their debt and better position themselves for the future.”
But despite the encouraging results, Chessen warned about the absence of a comprehensive improvement across all categories since the first quarter of 2012.
