ABA Says Delinquencies on Rise. MND Says Bad Implications for Housing Recovery
The American Bankers Association's (ABA) today released Consumer Credit Delinquency data. The ABA report said that the composite ratio, which tracks delinquencies in eight closed-end installment loan categories, rose 0.1 percent to a new record high of 3.23 percent of all accounts being delinquent.With continued job losses and longer periods of unemployment expected, further credit delinquencies are anticipated, especially if consumers are becoming increasingly reliant on credit cards to "make the ends meet". Credit issuers are thus likely to freeze or close accounts in anticipation of this event. With a loss of credit, consumers will be forced to make a decision on whether to make their housing payment or buy groceries to feed their family. Clearly this would lead to further housing delinquencies and eventually more foreclosures.
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