Skip to main content

Home-Related Delinquencies Are Mostly Down

Jan 10, 2017
Delinquencies in closed-end loans increased in last year’s third quarter, according to results from the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin

Delinquencies in closed-end loans increased in last year’s third quarter, according to results from the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin, but three of the four housing-related loan categories saw declines.

The ABA found home equity loan delinquencies fell from 2.70 percent in the second quarter of 2016 to 2.59 percent in the third quarter, while mobile home delinquencies fell from 3.17 percent to 3.11 percent and home equity lines of credit delinquencies fell from 1.21 percent to 1.16 percent. However, property improvement loan delinquencies had a slight uptick from 0.91 percent to 0.94 percent.

“The three-year trend of declining home equity delinquencies reflects a healthier housing market and rising home values,” said James Chessen, ABA’s chief economist. “Borrowers are on much firmer financial footing than they were just a few years ago, and greater equity gives them additional motivation to stay current on their obligations.” 

The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, rose six basis points to 1.41 percent of all accounts. But despite this increase, the ABA was confident on the financial viability of American consumers.

“Delinquency rates have held near historical lows for an unusually long period due in large part to consumers’ skillful financial management, but it was inevitable that they would edge up eventually as part of the natural credit cycle,” said Chessen. “It’s important for consumers to remain cautious and maintain their discipline in keeping debt at levels they can comfortably manage.”

About the author
Published
Jan 10, 2017
Co-Founder Mat Grella Terminated From NEXA

NEXA CEO Kortas states negotiations regarding the buyout will continue.

Mar 27, 2024
Comings And Goings At AmeriHome

Chief Operating Officer John Hedlund announced his retirement on Thursday in a LinkedIn post.

Mar 22, 2024
Rocket's Tim Birkmeier To Retire

Birkmeier is bidding farewell after a 28-year career at Rocket Companies.

Mar 21, 2024
How NAR’s Settlement Impacts Homebuying

While the settlement's silver lining is that homes are expected to become more affordable, many uncertainties loom over the housing market.

Mar 19, 2024
NAR Reaches $418 Million Settlement

The association agreed to give home sellers the option of compensating agents.

Mar 15, 2024
U.S. Non-Bank Mortgage Lenders Surge Amid Industry Consolidation, Fitch Ratings Reports

As smaller players exit the market, scaled originators like UWM and PennyMac Financial dominate, but challenges persist with low origination volume and pressured margins amidst rising interest rates.

Mar 14, 2024