Out of 11 categories of loan types, only home equity lines of credit (HELOC) rose, according to a report from the ""American Bankers Association"":http://www.aba.com/Pages/default.aspx (ABA).[IMAGE]
The report showed that for the first quarter of 2012, the delinquency rate for open-end home equity lines of credit increased from 1.69 percent to 1.78 percent. Open-end loans are those with a fixed amount of available credit but a balance that changes based on usage.
In the previous quarter, delinquencies fell in all 11 categories. Loans were categorized as delinquent if they were 30 days or more past due.
ABA Chief Economist James Chessen attributed the increase to the painful adjustment still underway in the housing sector.
""It will be many quarters before delinquencies on home equity loans get back to anything close to normal,"" he said.[COLUMN_BREAK]
For closed-end HELOCs, the delinquency rate fell from 4.08 percent to 4.00 percent. Other categories of closed-end loans include personal loans, auto loans, and property improvement loans. Closed-end loans are those with a fixed amount of money and set payment schedules and repayment periods.
The composite ratio, which tracks delinquencies for eight categories of closed-end loans, fell 14 basis points to 2.35 percent, making the 2012 first quarter the best quarter since 2007.
Looking forward, Chessen said he expects to see delinquency rates continue improving, but not as dramatically as seen in the last two quarters.
""We've moved back to historical norms now and further improvement could be hard to achieve. The economy has slowed recently and uncertainty remains high. This means banks will continue their prudent approach to extending new consumer credit as high unemployment levels are still creating loan losses,"" Chessen said. ""However, continued growth in jobs, moderating gas prices, and steady growth in personal income all will help consumers build a strong financial base.""
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