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Thursday, December 01, 2016

Household Debt Hits $12.4 Trillion As Subprime Loan Delinquencies Hit Highest In 6 Years: NY Fed

The latest just released Quarterly Report on Household Debt and Credit from the New York Fed showed a small increase in overall debt in the third quarter of 2016, prompted by gains in non-housing debt, and new all time highs in student loans which hit $1.279 trillion, rising $20 billion in the quarter.11.0% of aggregate student loan debt was 90+ days delinquent or in default at the end of 2016 Q3.

Total household debt rose $63 billion in the quarter to $12.35 trillion, driven by a $32 billion increase in auto loans, which also hit a record high of $1.14 trillion. 3.6% of auto loans were 90 or more days delinquent.

Mortgage balances continued to grow at a sluggish pace since the recession while auto loan balances are growing steadily, and hit a new all time high of $1.14 trillion.

What was most troubling, however, is that delinquencies for auto loans increased in the third quarter, and new subprime auto loan delinquencies have not hit the highest level in 6 years.

The rise in auto loans, a topic closely followed here, has been fueled by high levels of originations across the spectrum of creditworthiness, including subprime loans, which are disproportionately originated by auto finance companies. Disaggregating delinquency rates by credit score reveals signs of distress for loans issued to subprime borrowers—those with a credit score under 620.



Anonymous said...

And yet the credit card companies are reporting one of the best years ever for Christmas shopping. Go figure.

Anonymous said...

People have short memories. They get into trouble and as soon as things clear up the least little bit they are back at their old ways running up debt.....PLUS.....these same people know all the tricks to avoid creditors from their first brush with the collection agencies. This country is full of people who feel entitled. They never learned about hard work or saving money.

Anonymous said...

Keeping them harnessed to the plow is really good business.Americans are bound and determined to live above their means.Private school debts are silently killing a lot of them.If all private schools published the parents or guardians who are in arrears and how much so you would be shocked.Come to think of it that's not a bad idea.

Anonymous said...

The bankers are brilliant at psychological operations against the people.
They use the media to mind control us.
We want things we don't need.
We really, really want them.

Anonymous said...

Bought a car four years ago was repossessed when I was ten payments away from owning it. They told me my balance was two thousand over what I owed. When it was taken they said it was fees.Then they sent letters later to try to get me to pay for it and the fees were not there and they hadn't sold my car at auction. By then I was so disgusted I didn't trust them to follow through on thier part. So I didn't try to deal with them.Still haggling to get the balance down.