Released: July 03, 2007

Home equity loan late payments rise

Source: Jeannine Aversa, AP [USA Today]

Late payments on home equity loans climbed to a 1 1/2-year high in the opening quarter of this year, while delinquencies on credit card bills fell, painting a mixed picture of how people are managing their debt.

The American Bankers Association, in its quarterly survey of consumer loans, reported Tuesday that late payments on home equity loans rose to 2.15% in the January-to-March quarter. That was up sharply from 1.92% in the final quarter of last year and was the highest since the late summer of 2005.

Delinquencies rose to 2.94% from 2.82% on mobile home loans, and to 0.60% from 0.57% for home equity lines of credit. “There are still signs of consumer financial distress, which will continue throughout most of this year as the worst of the housing problem works its way through the economy,” said James Chessen, the association’s chief economist. Payments are considered delinquent if they are 30 or more days past due.

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