Like The Herald Business Journal on Facebook!
The Herald of Everett, Washington
Customer service  |  Subscribe   |   Log in or sign up   |   Advertising information   |   Contact us

The top local business stories in your email

Contact Us:

Josh O'Connor
Phone: 425-339-3007

Maureen Bozlinski
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049

Jim Davis
Phone: 425-339-3097

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

Payment on loans improves across board

SHARE: facebook Twitter icon Linkedin icon Google+ icon Email icon
By E. Scott Reckard
Los Angeles Times
LOS ANGELES -- Delinquencies are lower in all 11 consumer loan categories tracked by the American Bankers Association, a rare occurrence that reflects the nation's improving jobs picture and the progress that consumers and banks have made in cleaning up their respective financial problems.
During last year's fourth quarter, borrowers were current more often than they were in the third quarter on home equity loans and lines of credit, property-improvement loans and loans for cars, boats and mobile homes, the bankers' trade group said in a report Thursday.
The last time the American Bankers Association survey showed loan performance better across the board was in the last quarter of 2004, said James Chessen, the trade group's chief economist.
"It's always a bit shocking when every single category shows a decline in delinquencies," Chessen said in an interview. "It's extremely rare."
The bankers group has conducted the quarterly survey since the 1970s. The latest report classified as delinquent any loan that was in arrears for at least one month.
Consumers are reaping the benefits of several years spent hunkered down and paying debts, helped by lower interest rates engineered by the Federal Reserve.
"They're managing the debt they do have much better, and the amount of debt as a portion of income is going down," Chessen said.
Banks are in better shape and more willing to lend, the trade group said.
Credit monitoring firms Equifax Inc. and Moody's Analytics Inc. said in a recent joint report on consumer lending that subprime credit card and car loans -- made to people with poor or no credit -- are quickly increasing.
Chessen said that trend reflected confidence on the part of bankers that the economy would continue to improve.
The biggest problems involve housing-related loans, where slowly declining delinquencies still are high, as well as gasoline prices, Chessen said.
"The more money you pull out of your pocket and put into a gas tank, the less you have for paying your debts and spending on other things," he said.
The most important factor is whether the economy generates jobs, he said.
Initial filings for unemployment benefits are at four-year lows, and the nation's gross domestic product, a key measure of economic growth, rose at an annualized rate of 3 percent in the fourth quarter.
"The connection is obvious: When someone loses a job, it's much more difficult for them to meet their obligations," Chessen said.
"If we continue to see steady growth in jobs, we'll see continued improvement" on the loan front, he said.
(c)2012 the Los Angeles Times
Visit the Los Angeles Times at
Distributed by MCT Information Services
Topics: t000023135,t000002537,t000040342,t000023122



Market roundup