S&P-Experian: Default Rate On First Mortgages Fell Again In April

Posted by Patrick Barnard on June 07, 2016 No Comments
Categories : Mortgage Servicing

About 0.69% of all first mortgages nationwide were in default as of the end of April – down from 0.77% in March and down from 0.83% in April 2015, according to the most recent S&P/Experian Consumer Credit Default Index report.

About 0.58% of all second mortgages were in default – down from 0.59% in March but up from 0.43% in April 2015.

Meanwhile, the default rate for auto loans was about 0.97%, down from 1.02% in March but up from 0.94% in April 2015. The default rate for bank cards was 3.09%, up from 2.92% in March but down from 3.18% in April 2015.

The composite rate was about 0.86%, down from 0.93% in March and down from 0.97% in April 2015.

“For two months, the overall consumer credit default rate has dropped to new lows, while the default rate on bank cards has climbed,” reports David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a release. “Since the financial crisis, consumers are paying more attention to their debts, particularly longer-term financial commitments, such as homes and autos. The mortgage debt service ratio – the percentage of disposable income going to service mortgage debt – is at its lowest point since 1980. The total debt service ratio, which includes loans with scheduled payments, is close to a record low. The savings rate is now at about 5% of disposable income – slightly higher than its level in 2004-2006.”

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