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Big City Delinquency Deteriorates

U.S. mortgage delinquency edges up from record lows


Aug. 20 2013

By Mortgage Daily staff


Three of the nation's biggest cities experienced significant deterioration in the performance of consumer credit last month, while the nation as a whole saw a far more moderate rise in seriously late payments. Junior liens outperformed first liens.

The 90-day delinquency rate on first mortgages was 1.25 percent in July, rising from the 1.23 percent record low a month earlier.

But home loan servicers managed to pull down delinquency from the same month in 2012, when first mortgages that were at least three months past due accounted for 1.41 percent of the collective U.S. portfolio.

The monthly performance data was reported Tuesday in the S&P/Experian Consumer Credit Default Indices report.

At 0.54 percent, there was no change from June's record low 90-day delinquency rate on second mortgages.

But, like with first mortgage defaults, the second-mortgage rate retreated from July 2012, when it stood at 0.75 percent.

Factoring in performance on bank cards and auto loans as well as first and second mortgages, the composite index was 1.35 percent last month, 1 basis point worse than in June but 16 BPS better than the same month in 2012.

Miami maintained its standing as the metropolitan statistical area with the highest composite delinquency rate among the five-biggest MSAs: 2.06 percent. The rate shot up 31 BPS from June.

Also seeing significant deterioration was Chicago, where the rate jumped 16 BPS, and New York, where delinquency rose 9 BPS.

The 90-day rate in Dallas climbed 5 BPS, and delinquency in Los Angeles was up 3 BPS.

Still, despite the deterioration in the big cities, David M. Blitzer, managing director and chairman of the index committee for S&P Dow Jones Indices, noted that "consumer credit quality remains healthy."

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