S&P/Experian Credit Default Indices Show Decreases in Default Rates for First and Second Mortgages

Differences Seen Across Regions

Aug 16, 2011, 09:46 ET from Standard & Poor's

NEW YORK, Aug. 16, 2011 /PRNewswire/ -- Data through July 2011, released today by S&P Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed that second mortgages default rates experienced the largest decrease in July from 1.40% to 1.25%. First mortgage and bank card default rates decreased to 1.93% and 5.64%, respectively, from June rates of 2.02% and 5.69%. Auto loan default rate went down slightly from 1.29% in June to 1.27% 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," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. "All indices show default rates well below where they were in 2008 and 2009. However, occasional increases in some of the regional composites suggest that default rates may not fall a lot farther. While recording the highest default rate of the five cities we report, Miami is still far off the near-19% it had reported two years ago. However, the sluggish economies in both Miami and Chicago appear to be having a more severe impact on their residents than some of the other markets. Recent housing data has also pointed to weakness in these two markets beyond the national averages."

Consumer credit defaults varied across major cities in the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Dallas experienced a small increase in default rates, from 1.59% in June to 1.60% in July. Los Angeles and Miami decreased moderately to 2.15% and 5.37%, respectively from 2.17% and 5.41%. New York and Chicago saw default rates decrease to 1.80% and 2.54% in July, from 1.82% and 2.59% in June, respectively.

The table below summarizes the July 2011 results 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

July 2011 Index

Level

June 2011

Index Levels

July 2010

Index Levels

Composite

2.06

2.14

3.42

First Mortgage

1.93

2.02

3.24

Second Mortgage

1.25

1.40

2.77

Bank Card

5.64

5.69

8.20

Auto Loans

1.27

1.29

1.96

Source: S&P/Experian Consumer Credit Default Indices

Data through July 2011



The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:


Metropolitan Statistical Area

July 2011 Index

Level

June 2011

Index Levels

July 2010

Index Levels

New York

1.80

1.82

3.71

Chicago

2.54

2.59

3.75

Dallas

1.60

1.59

2.45

Los Angeles

2.15

2.17

4.58

Miami

5.37

5.41

8.92

Source: S&P/Experian Consumer Credit Default Indices

Data through July 2011



Jointly developed by S&P Indices 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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