Mixed Results on Residential Property Loan Delinquencies

Loan delinquencies related to residential property were down in two out of four categories in the second quarter data, as reported in the American Bankers Association’s Consumer Credit Delinquency Bulletin. 

During the second quarter, home equity loan delinquencies fell from 2.74 percent to 2.70 percent, while mobile home delinquencies fell from 3.41 percent to 3.17 percent. However, property improvement loan delinquencies rose from 0.89 percent to 0.91 percent while home equity lines of credit delinquencies rose from 1.15 percent to 1.21 percent.

The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell three basis points to 1.35 percent of all accounts—a record low that was fueled, in large part, but the drop in home equity loan delinquencies. But the three open-end installment loan categories all saw delinquency increases. Outside of home equity loan and mobile home delinquencies, the only category to record a decline was personal loan delinquencies with a scant dip from 1.44 to 1.43 percent.

“Small ups and downs are expected, but improvement is still very much in the cards for home-related delinquencies,” said James Chessen, ABA’s chief economist. “Rising home prices have restored equity, providing even more incentive for borrowers to stay current with their payments.”