First Mortgage Defaults Uptick in December

Mortgage defaults on first mortgages were up slightly last month, according to the latest date from S&P/Experian Consumer Credit Default Indices.

The first mortgage default rate in December was 0.71 percent, up one basis point from November. However, the second mortgage default rate dropped from 0.48 percent in November to 0.41 percent in December. The composite default rate rose two basis points to 0.89 percent, while the default rates on bank cards and auto loans increased.

David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, noted that default rates on mortgages varied widely across the country.

“Among the five cities reported on each month, Miami has a larger and increasing first mortgage foreclosure rate,” said Blitzer. “Home prices in Miami, as in most cities, have recovered from the financial crisis. However, Miami home prices, as measured by the S&P CoreLogic Case-Shiller Home Price Index, as of October 2016 were 22 percent below their December 2006 peak, while nationally, home prices have recently surpassed the pre-crisis peak set in July 2006. Florida also lags national trends in other measures—it is among the five states with the most foreclosures in 2016.”