Loan performance on first and second mortgages slipped last month, though some deterioration is to be expected as a result of higher-risk lending by banks.
Consumer creditors
saw a decline in loan performance in August, with the rate of 90-day delinquency worsening four basis points from a month earlier to 0.96 percent in August.
The rate of serious delinquency on consumer credit — which reflects
performance on bank cards, auto loans and first and second mortgages, was down from 1.03 percent in August 2014.
The statistics were reported in the S&P/Experian Consumer Credit Default Indices from S&P Dow Jones Indices and Experian.
“To reflect that the growth in credit is largely due to loosening of credit standards indicating banks are willing to bear increased risk by approving more subprime consumers — which will lead the higher default rates,” David M. Blitzer, managing director and chairman of the S&P Dow Jones Indices index committee, said in the report.
In Dallas, 90-day consumer delinquency was 0.71 percent, climbing seven basis points from July 2015 but still lower than any of the five-largest metropolitan areas.
Miami had a serious delinquency rate of 1.46 percent, the highest among the five-largest MSAs and up a basis point from a month earlier.
On first mortgages, the 90-day rate was 0.84 percent in August 2015. That was four BPS worse then the previous month.
In the same month last year, the first-mortgage delinquency rate was 0.91 percent.
Second-mortgage 90-day delinquency climbed two BPS from July to 0.57 percent. The second-mortgage rate was 0.51 percent in August 2014.
