S&P/Experian Indices Show Rise in Mortgage Defaults

Auto Default Index Experiences Biggest Decline This Month

Dec 21, 2010, 09:34 ET from Standard & Poor's

NEW YORK, Dec. 21, 2010 /PRNewswire/ -- Data through November 2010, released today by Standard & Poor's and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed a rise in monthly default rates for first and second mortgages to 3.05% and 1.80% respectively. While this is the first rise in defaults for first mortgages since December 2009, year over year decline is still 34.84%. Auto loans experienced the biggest decline this month to 1.76% from 1.92% in October. The bank card index declined slightly to 6.84% default rate.

"Default rates for auto loans and bank cards declined in November while first and second mortgages experienced somewhat higher defaults. However, the deterioration in the mortgage sector may be temporary: rates of new defaults have been declining for over a year with occasional brief interruptions, says David M. Blitzer, Managing Director and Chairman of the Index Committee.  "Government economic data point to improvements in the bank card and auto sectors with increases in credit balances and rising sales. The figures for five leading metropolitan areas confirm key housing trends found in other S&P reports.  Los Angeles is experiencing the beginning of stability in housing while Miami, and much of Florida, continue to face credit default concerns. Other metropolitan areas are seeing gradual improvements in consumer credit defaults as their economies stabilize."

Consumer credit defaults varied across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release only Dallas had declining default rates of 2.20%. Los Angeles and Chicago experienced slights increases in defaults this month to 3.25% and 3.34% respectively. Miami had the largest monthly increase to 10.26%, driven by the large increase in first mortgage defaults.

The table gives summary results for November 2010 for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

S&P/Experian Consumer Credit Default Indices

National Indices

Index

November

Index

Level

Change

from

October,

2010

Change

from

November

2009

Composite

3.13

3.50%

-33.75%

First Mortgage

3.05

4.95%

-34.84%

Second Mortgage

1.80

0.65%

-49.84%

Bank Card

6.84

-0.97%

-17.90%

Auto Loans

1.76

-8.07%

-32.49%





Source: S&P/Experian Consumer Credit Default Indices

Data Through: November 2010



The second table provides the S&P/Experian Consumer Default Composite Indices for five selected metropolitan statistical areas:


Metropolitan Statistical Area

November

Index Level

Change from October, 2010

Change from November

2009

New York

3.03

8.70%

-32.12%

Chicago

3.34

1.76%

-34.67%

Dallas

2.20

-2.90%

-38.08%

Los Angeles

3.25

2.31%

-49.94%

Miami

10.26

45.88%

-23.06%


Source: S&P/Experian Consumer Credit Default Indices

Data Through: November 2010



Jointly developed by Standard & Poor's and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien. The Indices are calculated based on data extracted from Experian's consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian 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.

For more information, please visit: www.consumercreditindices.standardandpoors.com.

About S&P Indices

S&P Indices, a part of McGraw-Hill Financial, is the world's leading index provider maintaining a wide variety of investable and benchmark indices. Over $1.25 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds. For more information, please visit www.standardandpoors.com/indices.  

Standard & Poor's does not sponsor, endorse, sell or promote any S&P index-based investment product. The S&P/Experian Consumer Credit Default Indices are products of S&P Indices, which operates independently of Standard & Poor's Ratings Group. Standard & Poor's Ratings Group plays no role in the compilation, distribution or licensing of the Indices.

About Experian Capital Markets

Formed as a response to market needs, Experian Capital Markets leverages Experian's comprehensive U.S. consumer and business databases to provide data and analytics to serve the transparency needs of the structured finance market participants. By taking underlying borrower data and applying advanced analytics, Experian provides insight into U.S. consumer and business credit behavior across all obligations, helping to forecast future payment patterns on prepayments, delinquencies, charge-offs or defaults for non-agency residential mortgage–backed securities and other asset-backed securities.

About Experian

Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2010, was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and Sao Paulo, Brazil.

For more information, visit http://www.experianplc.com.

Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners.

For more information:


Dave Guarino

Standard & Poor's

Communications

212-438-1471

Dave_Guarino@standardandpoors.com


David Blitzer

Standard & Poor's

Chairman of the Index Committee

212-438-3907

david_blitzer@standardandpoors.com


Susan Henson

Experian Public Relations

714-830-5129

Susan.henson@experian.com





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