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1st Mortgage Lates Up, 2nd Mortgage Rate Spikes

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While the rate of serious delinquency on residential loans in senior position was minimally higher last month, junior-lien loans saw significant escalation.

Consumer credit delinquency of at least 90 days concluded October at
0.90 percent, according to the Composite Consumer Credit Default Index.

The index, which reflects performance on
automobile loans and bank cards as well as first and second mortgages, worsened 2 basis points from the preceding month.

Serious delinquency worsened by 3 basis points compared to the same month last year.

S&P Dow Jones Indices LLC and Experian reported the data Tuesday. The two firms jointly developed the index.

The composite index in Chicago was 1.08 percent, up from September by 8 BPS — the biggest increase of any of the five largest cities reported.

Los Angeles’ 0.72 percent rate was the lowest, though that was 7 BPS worse than a month earlier.

Delinquency plunged 13 BPS in Miami to 1.06 percent, the best month-over-month improvement.

The 90-day rate for U.S. first mortgages was 0.67 percent as of the most-recent date, a single basis point more than as of Sept. 30. Serious first mortgage delinquency, however, has fallen 3 BPS from a year ago.

Serious second-mortgage delinquency ended last month at 0.79 percent — skyrocketing from 0.53 percent in September 2017 and 0.58 percent in October 2016.

Some insight into the deterioration of serious second-mortgage delinquency might be gathered from comments made by
David M. Blitzer, managing director and chairman of the index committee at S&P, about consumer credit.

“The one concerning item, which might explain the default numbers, is recent softness in real disposable personal income,”  Blitzer stated in the report. “If a widening spread between income and spending appears, defaults may fill the gap.”

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