Late Loan Payments Hit Record High

3Q Delinquencies Hit Record Levels For Indirect Auto Loans And Home Equity Lines Of Credit

(CBS/ AP)  Late payments on consumer loans in last year's third quarter hit the highest level since record-keeping began in 1980, the American Bankers Association said Wednesday.

The association said delinquencies rose to a seasonally adjusted 2.9 percent from 2.68 percent in the second quarter. The number is a composite ratio reflecting the percentage of accounts across eight categories of consumer loans with payments overdue 30 days or longer.

The previous record was 2.88 percent, set in the third quarter of 1989, ABA spokeswoman Carol Kaplan said.

The problem started with mortgages, reports CBS News business correspondent Anthony Mason, but now delinquencies on auto loans and home equity loans have reached record levels. And a new study says it's spreading to credit cards.

Since July, the study found, balances that are more than 60 days past due have risen more than 34 percent, Mason reports, and 5 percent of all credit card borrowers are now more than 2 months behind.

The Washington-based ABA said delinquencies hit record levels in the July-through-September period for two types of loans: indirect auto loans and home equity lines of credit.

Indirect auto loans, which account for 90 percent of auto loans, are bank loans arranged through a third party such as an auto dealer. Delinquencies for those loans jumped to 3.25 percent from 3.07 percent in the second quarter, the ABA said. The previous record in that category was 3.13 percent, set in the fourth quarter of 2007.

Delinquencies for home equity lines of credit rose to 1.15 percent from 1.08 percent. The previous quarterly high in that category was 1.1 percent, set in last year's first quarter.

"The number one factor in rising consumer credit delinquencies is job losses," said James Chessen, the ABA's chief economist. "With one million jobs lost in the first three quarters (of 2008) and two and a half million expected for the year, delinquencies of all types of consumer loans will likely increase in the coming quarters."

The bank card category was one of only two that showed a third-quarter decline in delinquencies, dropping to 4.2 percent of all accounts from 4.54. The other category that fell was direct auto loans, with delinquencies declining to 1.71 percent from 1.77 percent.

In addition to indirect auto loans, categories that make up the composite ratio and posted increases in third-quarter delinquencies included: property improvement, marine, recreational vehicle, mobile home, personal loans and home equity loans.

[win4usa]

Maybe people will learn the difference between wants and needs. If you can''t afford to pay cash then you can''t afford to have it.

[whitemale08]

And yes, I firmly believe you''''re being systematically brainwashed by the corrupt media lead by the pinko commies who''''ve hijacked the DNC.

Posted by TexHillGirl at 12:49 AM : Jan 08, 2009--

You have no idea what you are talking about.

I lived through the Carter years and we were in much better shape then we are now.

Talk about ''gas lines'', have you seen how many gas stations have closed due gas going up to 5 bucks a gallon?

Fannie and Freddie going under never happened on Jimmy Carter''s watch.

The Big 3 never was going bankrupt under Jimmy Carter.

The banks going under and trillions in bailout money never happened in Jimmy Carter.

This is the worse economy since the Great Depression and it''s possiby worse if we do not reject Republican ideaology of ''supply-side-trickle-down-union-busting-low-wage-service-sector-post-industrial-voodoo-bullsh*t'' economics!

Reagan was an idiot!

[stinginrich]

"We''ll meet again, don''t know where, don''t know when,
But I know we''ll meet again, some sunny day.
Keep smiling through, just like you always do,
''Til the blue skies drive the dark clouds far away"...

-Dame Vera Lynn


Well, it was a nice little run, (233 years), but once again, the Greedy Scumbags, Buttweasles, and Assmonkeys couldn''t help themselves from sucking it dry......


United States of America
1776 - 2009
R.I.P.

[flsunjnky]

No, ibsteve2u. She thinks that we need to take the most krapped out place on the earth that the Republicans have left us and made it BLOOM!

[missingamerica]

The freaking Jews took the most krapped out place on the earth and made it BLOOM! WHAT''''S WRONG WITH AMERICANS?

Posted by TexHillGirl at 12:52 AM : Jan 08, 2009

lollll...

Li''ll Miss "Liberals live on welfare!" conveniently chooses to ignore the massive subsidies Israel has received from the U.S. taxpayer for decades upon decades when doing so would interfere with her hard-right biases...

[flsunjnky]

You''re right ibsteve2u. Most of the people that HillGirl refers to, as far as gaining employment after 17 weeks of unemployment, are underemployed! And we need to think that is progress? HA!

[flsunjnky]

I believe the job statistics are greatly a bunch of BULL!
....how can you expect people to be happy crapped up in a bunch of slums where there''''s no work and no efforts for work, because nobody wants to invest there...
Posted by TexHillGirl

Do you realize that this is a national problem? Don''t you know that slums are not in rural communities where unemployment is rampant? Do you really have any clue.

No. You have a frail grasp on reality.

[missingamerica]

You know the sad thing - as necessary as it may be - about Obama''s stimulus idea that is based upon the reconstruction of our sadly and long-neglected infrastructure?

Most of those computer scientists, engineers, and the other highly-educated, highly-proficient types who invested all of that money into getting expensive four-year degrees have been displaced by the lower cost of living and lack of environmental and worker and consumer safety laws offshore?

All they have to look forward to is downgrading their dreams to accommodate the continuing slide in their income-generation capabilities.

And the march to dumb down America and eliminate its technological superiority stumbles on...

[flsunjnky]

downtowner97, you are in the very position that many of Americans are into right now. And we need solutions. We don''t need them from yesterday, we need them now and we need them now. Solutions that will last for us and be there tomorrow too.

[flsunjnky]

It''s really nice if you can live with your head in the clouds. Denial? Is that what they call it? The fact is that we are where we are. Solutions come from forward thinking.

[downtowner97]

I am a homeowner. I am miserable as I watch the value of my home drop by the day. The house is worth less than I owe on it. My one employee is a renter. Life has not changed for him, in fact, he hopes to be able to re-negotiate a lower rent when his lease is up.

People who live from paycheck to paycheck were always looked down upon by homeowners with retirement accounts. Now these people are in the enviable position of being able to move to follow what work is left, and to take on roommates to help with the rent.

[shanev137]

Actually our country has been in much worse shape than this before. We''''ve just all conveniently forgotten those time, becasue mostly people are brainwashed by the media humping statistics that most likely aren''''t even real.


------------


Like when?

Are you saying we all just conveniently forgot how bad it was during the 1930''s?

Made up statistics that aren''t even real?

You really don''t think a hell of a lot of people are losing their jobs right now?

You really don''t think our country is $11 trillion in debt right now?

[flsunjnky]

Nice HillGirl. Americans have invested in their future, and watched it go down the drain when the market fell, the 401Ks disappeared, and they got foreclosed on. What a joke, go ahead and blame it on people trying to build a retirement and a future. And then tell them they have created a communistic opportunity! Get counseling!

[missingamerica]

(P.S., genius: Due to excessive greed on Wall Street in combination with excessive greed among the various oil cartels [the producers, refiners and distributors, and hedge funds], the credit that was driving the credit-based economy the Fed and the Republicans created to conceal the ill-effects of inequitable free trade and "trickle-down" economics that rained money on many other nations but not here dried up and the economy stopped.

Or can''t you read, either?)

[missingamerica]

You are being frankly brainwashed with this krap that the rich have taken advantage of you...when the only ones taking advantage of you is your government that won''t stop spending either. In fact the government is trying to attack the rich also and render them poweless...the only problem is, this is not a dictatorship (yet), and your government representatives need the rich to get elected. Catch 22.

Posted by TexHillGirl at 10:38 PM : Jan 07, 2009

So, that is poor people who pay all of the lobbyists on "K" Street to pay Congress what to do?

Well, I''ll be an krap-believing, elitest, increasingly-liberal ***********!

[whitemale08]

If you look around accross America just about every town looks like the trash you see on the floor in a nightclub when it shuts down.

We had a big credit card party and now the party is over, we literaly ate our houses by taking out home equity to shop at Wal Mart.

Now the entire financial system has crashed because there is no rebound from this.

The only hope we have is a New Bretton Woods fixed-exchange-rate system that will stabilize our currency and then we can rebuild America the right way and finish development of countries in Africa, Asia and South America.

That will put everybody back to work. Wall Street/City of London will just have to shut down and go away while human beings work together to better humanity.

[toobigtofail]

tmittelstaed

at 7:30 pm, excellent description of whats going down

[fahren451]

I am also a Democrat who pays his bills and the only debt we carry is the mortgage on our home. But I am not as foolish or boastful as some on this forum. I know our household expenses and income - and if I was out of work for a year it would severely harm us. There is nothing that separates me from a lot of people out there other than having a paycheck.
People don''''t seem to understand that these days so very many jobs in the US economy are present due to structural decisions made by government. When the laws were adjusted to make it cheaper for companies to outsource labor to foreign countries then most companies did so - and the ones that refused (more than you think, by the way) were driven out of business so it didn''''t matter that they may have resisted in the long run.
The only reason that today there''''s interest in the government in fixing the mess is that the rich people are now seeing their own wealth starting to go away. But for the last half-century the wealthy have arranged with the government to move more and more of the nation''''s wealth away from the middle class and into their pockets - they have been doing it for so long that they basically forgot that eventually the regular people won''''t have anything left to take away.

Posted by tmittelstaed at 07:30 PM : Jan 07, 2009

bump

[mythoughtsr]

We found ourselves in trouble last year. One 2 month layoff did us in. We were behind in everything but the house and vehicle. We cut services. I work from home online so we kept the internet but that is tax deductible. We went to digital select cable, stopped the cell phones, no eating out, no vacation, we called our credit card companies and told them what we could pay and they said, NOPE! It wasn''t enough. We had emergencies with our sewage busting and our roof had to be replaced, dryer went up, you name it. We called them and said, "We want to pay". THEY said no. So, we filed Chapter 7 and in 6 weeks, they lose it all and we owe NOTHING. Do I feel badly? H.e.l.l no. They were rude, called us 40-50 times a day, called us liars and thieves, well guess what, now we''re debt FREE, cut up the cards and they can stuff a sock in it!

[tincup356]

So what is it? What is this great fear about leaving and finding security in another land? Your forefathers did exactly that, remember?

Posted by expatriate2 at 09:11 PM : Jan 07, 2009...................................................... the problem is America is my home born and raised here.....I''m sick and tired of watching lifetime politicians,*** up our country, not representing the people,going to wars that they had no business going to,wiping their butts with the bill of rights and constitution,,,,and last but not least.....Robbing taxpayers for generations to come....to give money to banks that paid big lobby dollars...they are committing treason....any true patriot would take Thomas Jeffersons advice and prepare their arms against threats from within.