And Now, Some Financial Advice From Benny Hill
I’ll bet you didn’t see this coming. Andrew Edwards, for the Wall Street Journal’s Real Time Economics Blog, reported yesterday that delinquencies on home-equity lines of credit issued in 2005 and 2006 shot up last month, according to Standard & Poor’s. Edwards wrote:
S&P said that 9.19% of lines issued in 2005 and 11.45% of loans issued in 2006 are delinquent, up 6.49% and 6.51% from February. Serious delinquencies, where lines are 90-days plus overdue or in foreclosure, shot up 8.83% and 8.75% for 2005 and 2006, respectively, representing 5.3% and 6.34% of the years’ total issuance…
Delinquencies on lines issued in 2007, which have the worst record of cumulative losses in the credit crisis so far, fell 9.06% to 4.72% of the aggregate. S&P said 3.5% of year-old lines issued in 2007 have been booked as losses - more than three times the rate for year-old 2006 lines. Seriously delinquent 2007 lines were flat at 2.64%.
During the heady days of the housing market run up, home-owners took cash out of their houses in the form of higher mortgages - under the assumption that values would continue to rise…
As the English comedian Benny Hill once said in a skit, you should never ASSUME, or else you might make an ASS out of U (and ME)…
Source:
“Delinquencies Rise on Home Equity Lines of Credit”
Andrew Edwards
Wall Street Journal (Real Time Economics Blog), April 21, 2008
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