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First Mortgages lead the drop in June
NEW YORK () – Data through June 2010, released today by Standard & Poor’s and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, show that the monthly default rates declined for all five credit lines. Defaulting balances of bank card loans were 8.8% in June, down from 8.9% in May. First and second mortgage default rates were 3.3% and 2.4% respectively, with first mortgage default rates declining 5.0% from last month and 45.2% from a year ago. Auto loan defaults were 1.7% in June, down from 1.8% in May.
“The consumer credit picture shows encouraging progress as default rates continue to fall across major categories and in the highlighted cities. The data are consistent with reports that people continue to eschew debt and as the slow recovery from recession and financial turmoil continues. For the economy this is mixed news – better credit quality, as seen in this report is clearly positive. However, as reported earlier by the Federal Reserve, consumers credit use is declining, dampening the outlook for spending,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor’s.
Consumer credit defaults vary across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release, New York had the largest decline in defaults in the last month at 12.11% while Dallas showed the smallest decrease of 29.59% in the past year. The sharpest