Recent trends can be encouraging, but delinquency levels are less heartening. That is the message the American Bankers Association data which indicates that loan delinquencies across all types of credit recently have fallen. That may be the expected effect with the emergence of the economy from recession. (Now comes the big however.) However, as the accompanying charts and table indicate, the declines have been modest and leave delinquencies still quite high.

Amongst open-end loans, the decline in bank-card delinquencies has been most dramatic. At 3.63% of loans outstanding, the rate has fallen more than one percentage point from its high. The decline no doubt reflects consumers' conscious effort to reduce debt levels. Other open-end bank loans such as home equity and non-card revolving financing also have shown a similar, but relatively modest, decline.

By-and-large, delinquency rates on closed-end loans remain high. Here, the effects of a total unemployment rate near 17% and a median duration of unemployment at roughly 34 weeks are at work. The most disturbing increase may be the surge in delinquencies on personal loans. Its recent decline to 3.6% still leaves it up from under 2.0% as recently as 2007. Making home equity loan payments also has proved difficult. The delinquency rate of 4.0% is nearly double that of late-2006, a clear reflection of loan values exceeding property valuations. And then there's the doubling of educational loan delinquencies to 8.7%. The unemployment for individuals with a bachelors degree or higher has more-than-doubled to 4.4%. Elsewhere, the decline of automobile loan delinquencies may reflect a switch to leasing. The drop in property improvement delinquencies may just reflect a drying up of the business.

The delinquency rate figures can be found in Haver's DLINQ database.

Underwater Mortgages from the Federal Reserve Bank of San Francisco is available here.

* Break in data series in 2008 & 2009

** A direct loan is a loan directly from the bank to the customer. An indirect loan is a loan that is given to the customer from the dealership who then has to go through a bank.