Monthly default rates in July declined for first mortgages, but a larger number of homeowners fell behind on their second lien payments, according to data released jointly by ""Standard & Poor's"":http://www.standardandpoors.com and ""Experian"":http://www.experian.com.
[IMAGE] The two companies' credit indices show that defaulting balances on first mortgages were 3.2 percent last month, down from June's 3.3 percent, demonstrating continued improvement in the performance of first lien home loans.
However, second mortgage default rates increased to 2.8 percent in July, compared to 2.4 percent the month prior.
David M. Blitzer, managing director and chairman of the Index Committee at Standard & Poor's, pointed out that the rise in late payments on second mortgages nationally follows consecutive declines in recent months.[COLUMN_BREAK]
""While it is too soon to tell if this is a momentary aberration or a major shift, combined with [recent] economic news these data do raise concerns,"" Blitzer said.
Consumer credit defaults overall Ã¢â‚¬" which the report measures collectively as past dues on first and second lien mortgages, as well as auto loan and credit card delinquencies Ã¢â‚¬" varied across major cities and regions of the United States.
Among the five major metropolitan statistical areas (MSA) included in each month's study, New York had the largest increase in defaults in the last month at 6.99 percent.
Los Angeles was the only one to experience a decrease in July of 3.46 percent. The sharpest decline in the last 12 months continues to be in Miami with 46.21 percent.
The indices are calculated based on data extracted from Experian's consumer credit database, which is populated with individual consumer loan and payment data submitted by lenders every month.
Experian's base of data contributors includes leading banks and mortgage companies, and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
The ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA) is scheduled to release its highly anticipated second-quarter mortgage delinquency report on Thursday.