Posts Tagged ‘default’

Auto and Mortgage Loan Defaults at Lowest Level in Decade

Posted on August 29, 2017 by Laura Lam

Despite a slight increase in July, the default rate for first mortgage loans still sits at its lowest point in the last 10 years, according to the latest S&P/Experian Consumer Credit Default Indices.  In fact, the mortgage default rate for first and second mortgages aren’t too far off from their July 2016 level, as homebuyers get better at paying their mortgage on time. The indices represent a comprehensive measure of changes in consumer credit defaults and include bank card and auto loan default rates. As seen in the chart on the left, the first mortgage default rate increased two basis…

Subprime Auto Defaults are Soaring

Posted on August 02, 2017 by Laura Lam

It’s classic subprime: hasty loans, rapid defaults, and, at times, outright fraud.  Only this isn’t the U.S. housing market circa 2007. It’s the U.S. auto industry circa 2017.  A decade after the mortgage debacle, the financial industry has embraced another type of subprime debt: auto loans. And, like last time, the risks are spreading as they’re bundled into securities for investors worldwide.  In July, 90-day auto loan delinquency rates eclipsed 3.8%, their highest levels since the financial crisis. Subprime car loans have been around for ages, and no one is suggesting they’ll unleash the next crisis. But since the Great…

Foreclosure Filings Down 20% from Year Ago

Posted on July 26, 2017 by Laura Lam

According to ATTOM Data Solutions’ Midyear 2017 U.S. Foreclosure Market Report the total number of U.S. properties with foreclosure filings during the first half of the year decreased by 20% from the previous year to 428,400, and down 28% from the first half of 2015.  While the amount of foreclosures decreased nationally, 7 states – Texas, Illinois, Connecticut, Oklahoma, West Virginia, Montana and North Dakota – and D.C. saw increases. ATTOM Data Solutions says that default notices, scheduled auctions or bank repossessions were lower in almost all areas but 8 areas saw an increase, led by a 60% rise in the District…

Foreclosure Activity Hits Post-Recession Low in April

Posted on June 08, 2017 by Laura Lam

ATTOM Data Solutions released its April 2017 U.S. Foreclosure Market data, which shows foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 77,049 U.S. properties in April, down 7% from the previous month and down 23% from a year ago to the lowest level since November 2005. “Foreclosure activity continued to search for a new post-recession floor in April thanks in large part to the above-par performance of mortgages originated in the past 7 years,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile we are seeing an elevated share of repeat foreclosures…

Bank Card Default Rate Increases, Auto Loan Defaults Down

Posted on May 15, 2017 by Laura Lam

The S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, shows the composite rate unchanged from last month at 0.94% in March. The bank card default rate recorded a 3.31% default rate, up 9 basis points from February. Auto loan defaults came in at 1.00%, down 5 basis points from the previous month. The first mortgage default rate came in at 0.75%, up one basis point from February and reaching a one-year high. The 5 major cities showed mixed results in March with two higher and three lower default rates. New York had the largest…

Millennials’ Debt Load Could Weigh Down Economy

Posted on May 09, 2017 by Laura Lam

Millennials — 21 to 34-year-olds — hold an estimated $1.1 trillion of the country’s $3.6 trillion in consumer debt, according to UBS, as rising student and auto loans outweigh a drop in mortgages.  All that rising debt is coming with rising default risks. A UBS evidence lab survey found that 52% of people worried about defaulting on any loan over the next 12 months were in the 21 to 34 age group. That’s not good news considering those same individuals are meant to be the largest source of spending on big-ticket purchase items like houses and cars over the next year.  There is already…

Foreclosures Continue Descent but Some Cities Still Struggle

Posted on May 03, 2017 by Laura Lam

ATTOM Data Solutions recently released its Q1 and March 2017 U.S. Foreclosure Market Report, which shows first quarter foreclosure activity was below pre-recession levels nationwide and in 102 out of 216 metropolitan statistical areas (47%). Nationwide the report shows foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 234,508 U.S. properties in the first quarter of 2017, down 11% from the previous quarter and down 19% from a year ago to the lowest level since Q3 2006. The first-quarter foreclosure activity total was 16% below the pre-recession average of 278,912 properties with foreclosure filings each quarter…

Subprime Student Loans Resemble Pre-Crisis Mortgage Loans

Posted on April 28, 2017 by Laura Lam

Millions of U.S. parents have taken out loans from the government to help their children pay for college … now a crushing bill is coming due.  Hundreds of thousands have tumbled into delinquency and default. In the process, many have delayed retirement, put off health expenses and lost portions of Social Security checks and tax refunds to their lender, the federal government. Student loans made through parents come from an Education Department program called Parent Plus, which has loans outstanding to more than 3 million Americans. These loan applications ask almost nothing about its borrowers’ incomes, existing debts, savings, credit…

Over 40% Students Don’t Make School Loan Payments

Posted on April 26, 2017 by Laura Lam

More than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed, raising worries that millions of them may never repay.  The new figures represent the fallout of a decade-long borrowing boom as record numbers of students enrolled in trade schools, universities and graduate schools. While most have since left school and joined the workforce, 43% of the roughly 22 million Americans with federal student loans weren’t making payments as of Jan. 1, according to a quarterly snapshot of the Education Department’s $1.2 trillion student-loan portfolio. About 1…

Consumer Defaults Predicted to Rise in 2017

Posted on April 24, 2017 by Laura Lam

About 17% of all U.S. consumers are likely to default on a loan payment over the next year, according to a recent report from UBS. More interesting, perhaps, is who these defaulters are.  The UBS Evidence Lab reports that the group’s profile is “middle and upper income, younger, male, urban, and concentrated in the coastal regions.” The UBS researchers also found evidence that defaults on auto loans are likely to spread to more non-prime defaults on credit cards and personal loans. About 16% of all auto loans outstanding are subprime, amounting to $179 billion out of total auto loans of…