LOAN DELINQUENCIES - 2017

How much problem are we seeing in credit delinquencies?  For now they are higher than before the Great Recession and seem to be growing but are not yet alarming.  Below are considered all loans and leases, student loan debt, automobile loan debt, and mortgage debt.

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Suggested Citation (above figure):

Board of Governors of the Federal Reserve System (US), Delinquencies on All Loans and Leases, To Consumers, Credit Cards, All Commercial Banks [DALLCCACBEP], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/DALLCCACBEP, May 15, 2017.*

Student Loan Debt:
In the third quarter of 2016, 16% of borrowers — but only 10% of outstanding dollars — were in default. In other words, defaulters have lower average balances than other borrowers.**

Automobile Loan Debt:
When considering auto ... loans originated in Q4 of the last 8 years — going back to 2008. ... I analyzed the first three, six, and nine months from the loan origination date.  ... the rates of delinquency have steadily increased in recent years, with the increase in the Q4 2015 loans opened equaling or even surpassing 2008 levels.
...........................................................................
When considering ... only for trades originated by Superprime and Prime consumers at the time of origination. You can see that although the trend is not as pronounced as when all grades are considered, even these tiers of consumers are showing significant increases in their 60+ days past due (DPD) rates in recent vintages.***

Credit Card Debt

At the same time, the improving jobs market and low unemployment has increased consumer confidence and spurred the demand for credit cards.

But as the number of credit card accounts in the U.S. rises, the majority of new customers are subprime borrowers, generally meaning those with a credit score of 660 or below. These are also the consumers who were affected the most by reduced lending during the recession and are gaining access to credit once again.****

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The bottom line, however, is that credit card delinquencies are still low.

Mortgage Debt
We need to remember that there is some problem from loans made before the Great Recession. Mortgage debt has been increasing gradually for several years (https://www.federalreserve.gov/econresdata/releases/mortoutstand/current.htm)

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The seasonally adjusted FHA delinquency rate increased to 9.02 percent in the fourth quarter from 8.3 percent in the third quarter, MBA data show. The jump, which followed the lowest delinquency rate since 1997, was driven by loans made since 2014 and early-stage delinquencies, those just 30 days past due. (http://www.cnbc.com/2017/02/15/mortgage-delinquencies-among-some-homeowners-just-spiked-spelling-trouble.html)

* https://fred.stlouisfed.org/series/DALLCCACBEP
**http://www.studentloanborrowerassistance.org/collections/federal-loans/default-and-delinquency/
*** http://www.experian.com/blogs/insights/2017/02/auto-loan-delinquencies-extending-beyond-subprime-consumers/
**** http://www.cnbc.com/2017/01/10/credit-card-auto-loan-delinquencies-rise.html