One day after the disclosure that foreclosures are at record highs, we see that loan delinquencies to banks are at record highs. I place the blame for this squarely on securitization, structured finance and bankster greed:
biz.yahoo.com
Loan delinquencies at U.S. banks at 8-year high-Fed
Wednesday September 11, 5:29 pm ET
WASHINGTON, Sept 11 (Reuters) - Loan and lease delinquency rates at U.S. banks rose to their highest levels in eight years in the second quarter of 2002 on climbing late commercial and industrial loans, according to recent Federal Reserve data.
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Delinquency rates at all banks climbed to 2.76 percent in the three months ending in June, the Fed said in a report on charge-off and delinquency rates on loans and leases at commercial banks. The last time the rate of delinquencies was higher was 2.84 percent in the second quarter of 1994.
Late commercial and industrial loans rose to a rate of 3.99 percent in the quarter, the highest rate since 4.2 percent in the first quarter of 1993.
Delinquent loans are 30 days past due.
Delinquency rates for commercial bank loans crested at above 6 percent at the end of 1990 and the beginning of 1991, when the U.S. economy was in its last recession. The level of late loans at commercial banks has been below 3 percent since early 1994.
The loans past-due data comes as mortgage bankers report mortgage delinquencies and foreclosures at record highs.
The Mortgage Bankers Association reported on Monday that 1.23 percent of mortgages were in foreclosure, the highest level in the 30 years the trade association has kept track of the number.
In addition, 4.77 percent of mortgage borrowers were delinquent in the second quarter, the highest level since the mid-1980s, the MBA said.
Analysts attributed the rise in foreclosure rates to climbing unemployment, among other possible factors.
Funny, but the beige book had a rather warped view of all this:
Banking and Finance
Bank loan demand was generally mixed. However, Richmond, Atlanta, and Chicago reported a moderate rise and New York, Kansas City, and San Francisco reported an uneven experience. Demand for mortgages and refinancing remained high across the nation, with Richmond noting a marked increase. Contacts in Philadelphia expressed concern about the sustainability of real estate lending in the absence of growth in other sectors. Business lending continued to be weak in all of the reporting Districts. Demand for consumer loans has been strong in Chicago and Atlanta but mixed in New York and Philadelphia.
Delinquency rates were reported to be either stable or declining. However, credit standards have been tightened for commercial and industrial loans. St. Louis noted that such tightening has only occurred for small firms. Credit standards for other loans remained largely unchanged, except in Atlanta, which reported a tightening. Cleveland and Chicago reported no change in the quality of consumer or business loans; Philadelphia, however, noted a mild slippage.
Atlanta noted a surge in the number of borrowers looking to shorten the term of their loans. Cleveland reported increased competition across all lines of lending while San Francisco noted an increase only for low-risk lending.
Hmmm, they managed to avoid commenting on credit quality at all, other than to say that credit quality for mortgage loans was "stable to improving?!" HO HO HO!
Nearly all Districts reported strong residential sales and construction activity. On the other hand, commercial real estate markets remained weak. Banks in all Districts report strong demand for residential mortgages and refinancing, although business lending continued to be weak across the board. Credit quality was described as good and delinquency rates as either stable or declining.
So businesses note declining credit quality, personal income is flat, home prices are increasing...and we are to believe that credit quality of the mortgage borrower is "good"!? NFW, it's a BUBBLE! |
