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DS News Webcast: Wednesday 8/20/2014

While overall national consumer credit default has hit its lowest levels in 10 years, the first mortgage default rate continues to decline, according to the July 2014 S&P/Experian Consumer Credit Default Indices released on Tuesday. The first mortgage default rate slipped to 0.88 percent in July, down from .089 percent the previous month. It was the ninth straight month in which the first mortgage default rate experienced a drop. That rate has not experienced a month-over-month increase since October to November in 2013, which it crept up from 1.28 to 1.30 percent.

Second mortgage defaults also declined month-over-month and year-over-year, according to the index. July's second mortgage default rate of .52 percent represents a drop from .57 percent in June and .54 percent from July 2013. In November 2013, the percentage of second mortgage defaults reached .78 percent, its highest rate in the last 12 months. The July rate for first and second mortgage defaults were both lower than the composite consumer credit default rate for July of 1.01 percent. The composite default rate inched downward from 1.02 percent in June and is down from 1.34 a year ago.

The Consumer Financial Protection Bureau issued a bulletin Tuesday outlining how mortgage servicers should handle the loan transfer process. The bulletin includes a reminder to servicers to pay close attention to the new common-sense mortgaging rules implemented by the CFPB in January 2014, aimed at protecting consumers from being harmed financially during loan transfers. The bureau stated in the bulletin that its examiners will be carefully scrutinizing those loan transfers that include loss mitigation applications under review and those containing approved modification plans.

 

About Author: Jordan Funderburk

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