S&P and Experian Continue to Record Declines in Mortgage Defaults

Data through March 2011, released by ""S&P Indices"":http://www.standardandpoors.com/indices and ""Experian"":http://www.experian.com, showed a decline in mortgage default rates for the fourth consecutive month.

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The agencies' index of first mortgage defaults fell from 2.45 percent in February to 2.33 percent in March. As measured by the S&P/Experian Consumer Credit Default Indices, first mortgage defaults are down 41 percent from March 2010.

Second mortgage defaults also declined, down from 1.46 percent in February to 1.42 percent in March. The default rate in the second mortgage category of the S&P/Experian study has fallen 49 percent over the past year.

""Recent data from the Fed confirms a continuing decline in mortgage debt outstanding,” said said David M. Blitzer,

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managing director and chairman of the index committee for S&P Indices.

“The declining debt levels, combined with the economic recovery, are supporting lower defaults and a gradual improvement in consumers' financial condition,"" he explained, adding that ""This positive trend should help maintain the recovery.""

Not only has the ratio of on-time mortgage payments improved, but the agencies’ report indicates that consumers are making headway on their debt obligations overall. The data show a decline in monthly default rates across all credit lines â€" including bank cards and auto loans, in addition to mortgages.

""Modest declines in consumer credit default rates continue across all major sectors as consumers gradually rebound from the financial crisis of two years ago,"" Blitzer said.

Jointly developed by Standard & Poor's and Experian, the S&P/Experian Consumer Credit Default Indices track the default experience of consumer balances across major loan categories.

The indices are calculated based on data extracted from Experian's consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.

Experian's base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.