Written by Gaurav Bhola, MSM, Managing Editor & Community Manager on July 3, 2007 4:35 pm EST
The American Bankers Association (ABA) stated that between January and March 2007 payments on home equity loans rose to 2.15 percent, an increase of 0.23 percent since the fourth quarter of 2006. The ABA quarterly survey of consumer loans reflected delinquency rates based on a composite of several types of consumer loans such as boats, autos, home improvements, some home equity line of credit loans increased to 2.42 percent in the first three months of this year. This was the highest delinquency rate since second quarter of 2001, up 0.19 percent from the fourth quarter of last year.
The main instigator for the increase in the delinquency rate as shown by the composite survey was the rise of home equity loan delinquencies. Bill or loan payments are regarded as delinquent if they are past due by 30 or more days. The ABA survey results are based on data provided by more than 300 banks nationwide.
Nationwide the surprisingly brighter news about the decline of late payments on credit card bills was greeted by financial experts with bafflement and amazement. It is truly remarkable since the economy is in the doldrums and GDP has grown unremarkably at 0.7 percent the first quarter this year. Credit card debt, due to the late payments on credit card bills decreased the first three months of the year to 4.41 percent, a decrease of 0.15 percent from the fourth quarter of last year. Somehow, the credit card decline in late payments seems to be an anomaly, only the next quarter survey results will tell.
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