“Consumer Loan Delinquencies Tumble”
I work with many clients that want to get preapproved for a mortgage. Very often, I have to tell folks that they do not qualify for one reason or another. The qualifying process is more stringent today than it was a few years ago and that is a good thing.
I spend a lot of time coaching clients on improving their credit scores in order obtain a better interest rate. Very often there are mistakes or unreleased items, that I have to coach them on how to fix the problems. Most everything is fixable, somehow.
Credit, for the most part is getting better, delinquencies are down as more and more folks want to own a home and they are working harder to maintain good credit. A good sign for future first time home buyers.
Consumer Loan Delinquencies Tumble: ABA
By: Victoria Finkle
Consumers are increasingly paying down their debts, according to the American Bankers Association.
Delinquency rates in the fourth quarter of 2011 fell across all loan categories the trade group monitors, including credit cards, auto and home loans, the ABA reported.
The trend builds on gains seen a quarter earlier, when delinquency rates fell across seven of the 11 categories the group tracks.
"You can't get a better consumer credit report card than this," ABA Chief Economist James Chessen said in a press release, adding that the ABA hasn’t reported a quarter where every single loan category improved since 2004.
The ABA's composite ratio, which includes delinquency rates for eight closed-end installment loan categories, fell from 2.59% last quarter to 2.49%, the lowest rate since 2008. The ABA defines delinquency as a late payment that is 30 days or more overdue. Delinquency rates are seasonally adjusted.
Consumers made fewer late payments on personal loans, direct and indirect auto loans, property improvement, mobile home, RV and marine loans and home equity loans.
But Chessen warns that the housing market remains an area of concern. Home equity loans fell just slightly to 4.08% from 4.12% in the third quarter.
"Troublesome performance in housing-related loans is keeping overall delinquency rates elevated. The housing sector continues its painful adjustment, and it will take a long time before delinquency rates return to normal," he said. ABA also tracks delinquencies in three categories of open-end loans, or lines of credit: home equity lines of credit, non-card revolving loans and bank cards, all of which improved in the fourth quarter.
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