More bad news on the credit front, this time concerning home equity lines of credit and auto loans.
From the American Bankers Association:
In the latest sign that consumers are under financial stress, indirect auto loan and home equity lines of credit (HELOC) delinquencies reached their highest levels ever during the third quarter of 2008, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin. In addition, the composite ratio, which tracks eight closed-end installment loan categories, rose 22 basis points to 2.90 percent of all accounts (seasonally adjusted), the highest level since 1980.
ABA Chief Economist James Chessen said the figures show a continued weakening of the U.S. economy.
“The number one factor in rising consumer credit delinquencies is job losses. With one million jobs lost in the first three quarters and two and a half million expected for the year, delinquencies of all types of consumer loans will likely increase in the coming quarters,” Chessen said.
Delinquencies for indirect auto loans, which account for 90 percent of auto loans, rose 18 basis points to a record 3.25 percent. HELOC delinquencies rose seven basis points, marking another record high at 1.15 percent.
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