Late payments on home-equity products declined during the final three months of last year. But while the rate on closed-end loans was lower than 12 months prior, delinquency on lines of credit increased on a year-over-year basis.
Thirty-day delinquency on home-equity loans was 4.03 percent as of Dec. 31, 2012.
HEL delinquency was down from the third quarter, when the rate was 4.20 percent.
The most recent HEL delinquency level was also better than 4.08 percent in the fourth-quarter 2011.
The statistics were spelled out in the Consumer Credit Delinquency Bulletin from the American Bankers Association.
On home-equity lines of credit, 30-day delinquency improved to 1.85 percent from 1.93 percent as of Sept. 30, 2012.
But HELOC performance has deteriorated from the end of 2011, when the 30-day rate was just 1.69 percent.
On property improvement loans, delinquency of at least one month was 0.83 percent, falling from 0.89 percent as of Sept. 30, 2012. The property improvement delinquency rate has fallen 10 BPS over the past year.
The fourth quarter marked the first time in a year that delinquency on all three home-related loan categories was lower than in the previous period.
But performance worsened on mobile home loans, with the 30-day rate rising to 3.53 percent from 3.51 percent in the third quarter. Mobile-home delinquency has fallen, however, from 3.76 percent in the year-earlier quarter.
ABA’s composite ratio, which tracks delinquency on eight closed-end installment loan categories, was 1.99 percent in the fourth quarter, 17 basis points better than in the third quarter.
The composite ratio was also down from 2.49 percent a year earlier.
“The sharp decline in delinquencies reinforces the notion that the economic recovery has become more self-sustaining and is on a path to increased growth,” ABA Chief Economist James Chessen said in the report.
