First-Mortgage Defaults Rose In November

First-mortgage default rates rose for the third consecutive month in November, increasing to 2.17% from 2.08% in October, according to data released by S&P Indices and Experian. Second-mortgage default rates, meanwhile, fell slightly from 1.29% to 1.26%.

The first-mortgage default rate has gained 0.25 percentage points since reaching 1.92% in August, according to the firms. The increases in first-mortgage and bank card rates (4.91%) caused the national composite of consumer credit default rates to rise from 2.15% to 2.22%.

"These figures are not too surprising given some of the weak housing statistics we have seen over the past few months," says David M. Blitzer, managing director and chairman of the Index Committee for S&P Indices. "We also saw an increase in bank card default rates in November, but the October decline was so large that the November 4.91 percent is still well below the default rates we saw in late 2009 and early 2010. Auto loans and second mortgages saw drops in their default rates in November."

All five major metropolitan statistical areas (MSAs) reported in this release showed increases in default rates in November. Los Angeles had the highest default rates increase among these MSAs, rising from 2.15% in October to 2.53% in November. Miami, Chicago and New York increased to 4.47%, 2.84% and 2.21% in November, from 4.16%, 2.64% and 2.09% in October, respectively. Chicago, Los Angeles and New York have all seen at least three consecutive months of increasing default rates. Dallas' default rate moved up slightly from 1.30% in October to 1.38% in November.


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