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Economy in Brief

U.S. Loans In Arrears Jump in 2009
by Tom Moeller April 7,2010

The American Bankers Association reported that the number of loans past due as a percentage of the number of loans outstanding slipped just modestly at yearend '09. In addition, based on loan values, the figure was down slightly from its high. Either way, however, the news for all of 2009 was troubling since percentages were up sharply from where they were before the last recession began.

Home equity loans have fallen notably into arrears. Based on the number of loans, the percentage past due rose to 4.32 last year from 3.03 in 2008 and 2.39 in 2007. During 2006 that percentage was as low as 1.73. Based on the dollar-value of the loan, the news was worse. The percentage was 5.48 at yearend '09 versus 2.98 in 2008 and 1.50 in 2007. The low for the series was late in 2006 at 0.91.

The percentage of personal loans follow on the list of those past due at 3.63 versus 2.88 in 2008 and 2.48 in 2008. Based on dollar amounts, these percentages compare with 3.71 last year, 2.97 in 2008 and 2.45 in 2007.

Home improvement loans seem not to be ones that homeowners feel inclined to fall behind on. In fact, based on the number of loans outstanding the percentage has consistently fallen. However, the percentage is based on loan values rose. Here the percentage of 2.56 was up sharply from 1.93 in 2008 and 1.67 in 2007. The low was 0.78 back in 2005. Also, falling sharply were the number and value of auto loans in arrears.

Economic Challenges: Past, Present, and Future is the title of today's speech by Fed Chairman Ben S. Bernanke's and it can be found here.

Loans Past Due 30 or More Days as a % of Outstandings December November October 2009 2008 2007
Closed-End Loan
Personal Loans 3.63  3.71 3.84  3.63 2.88 2.48
 Automobile Loans
Direct From Bank 1.94 2.07 2.09 1.94 2.03 1.90
Indirect Through Dealer 3.15 3.27 3.24 3.15 3.53 3.13
Home Equity & Second Mortgages 4.32 4.41 4.41 4.32 3.03 2.39
Property Improvement 1.63 1.74 1.78 1.63 1.75 1.81
Open-End Loan
Home-equity 2.04 2.09 2.10 2.04 1.46 0.96
Bank card credit 4.39 4.52 4.63 4.39 4.52 4.38
Non-card revolving 1.46 1.51 1.45 1.46 1.35 1.12
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