Defaults Pick Up for All Credit Segments Except Auto, S&P/Experian Reports
Auto loans were the only credit segment to experience a decrease in defaults in September, falling to 1.29 percent from August’s 1.31 percent, according to the S&P/Experian Consumer Credit Default Indices.
NEW YORK — The default rate for auto loans fell from 1.31 percent in August to 1.29 percent in September, according to the S&P/Experian Consumer Credit Default Indices. The credit segment was the only one to experience a decrease last month, with defaults edging up for first mortgages, second mortgages and bank cards.
Defaults for first mortgages increased from 1.92 percent in August to 1.99 percent in September, while second mortgages inched up from 1.27 percent to 1.32 percent. The bank card default rate showed the largest basis point increase, rising from 5.26 percent in August to 5.36 percent in September.
"While this is only one month of data, we have not seen so many increases in default rates in about a year or more," says David M. Blitzer, managing director and chairman of the Index Committee for S&P Indices. "For most of the past three years, consumer credit default rates have been declining across both loan types and regions.”
Blitzer added that September's report was the first time the indices showed increases in four of five regions, three of four loan types and the composite, which rose from 2.04 percent to 2.10 percent.
Among the five major Metropolitan Statistical Areas (MSAs) reported in the announcement, New York realized its highest default rates since April 2011, increasing from 1.80 percent in August to 2.01 percent in September. Chicago, Los Angeles and Miami increased moderately to 2.47 percent, 2.12 percent and 4.59 percent in September, respectively, from 2.43 percent, 2.07 percent and 4.52 percent in August. Dallas was the only MSA where default rates fell, decreasing from 1.51 percent in August to 1.33 percent in September.
“We will have to closely monitor these data over the next few months to determine if September was just a temporary blip or the reversal of the recent trend," Blitzer said.
Jointly developed by S&P Indices and Experian, the S&P/Experian Consumer Credit Default Indices are constructed to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien. For more information, visit www.consumercreditindices.standardandpoors.com.
S&P/Experian Consumer Credit Default Indices National Indices | ||||
Index | September 2011 Index Level | August 2011 Index Levels | September 2010 Index Levels | |
Composite | 2.10 | 2.04 | 3.14 | |
First Mortgage | 1.99 | 1.92 | 3.02 | |
Second Mortgage | 1.32 | 1.27 | 2.14 | |
Bank Card | 5.36 | 5.26 | 7.04 | |
Auto Loans | 1.29 | 1.31 | 2.04 | |
Metropolitan Statistical Area | September 2011 Index Level | August 2011 Index Levels | September 2010 Index Levels | |
New York | 2.01 | 1.80 | 3.20 | |
Chicago | 2.47 | 2.43 | 3.56 | |
Dallas | 1.33 | 1.51 | 2.28 | |
Los Angeles | 2.12 | 2.07 | 3.48 | |
Miami | 4.59 | 4.52 | 7.61 |
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