National mortgage default rates drop in July

August 16, 2011 09:38AM

There has been a month-over-month decrease in national default rates for first and second mortgages, with second mortgage default rates dropping from 1.4 percent to 1.25 percent in July, according to Consumer Credit Default Indices by Standard & Poors/ Experian.

First mortgage and bank card default rates decreased to 1.93 percent and 5.64 percent from June rates of 2.02 percent and 5.69 percent, respectively. Auto loan default rates dropped slightly from 1.29 percent in June to 1.27 percent in July.

“By and large, July’s data support the downward trend we have observed over the past two years. Despite high unemployment rates, consumers continue to improve their financial positions, resulting in lower default rates than we were seeing during the recession,” said David Blitzer, managing director and chairman of the index committee. “All indices show default rates well below where they were in 2008 and 2009.”

Blitzer warned, however, that default rates may not fall a lot further. Miami, he said, is still far off the near-19 percent it reported two years ago.

Consumer credit defaults varied across major U.S. cities, the index says, with Miami decreasing minimally to 2.15 percent from 2.17 percent in June. New York saw default rates decrease to 1.8 percent from 1.82 percent. — Katherine Clarke