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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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From: Paul Kern	4/21/2008 11:41:18 AM
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UPDATE: Most Home-Equity Line Delinquencies Keep Rising Last update: 4/21/2008 11:31:34 AM DOW JONES NEWSWIRES Standard & Poor's said delinquencies on home-equity lines of credit issued in 2005 and 2006 shot up in March, underscoring continued trouble in the U.S. economy. 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. The lines S&P tracks were sold to investors as residential mortgage-back securities. Their declines have fueled the current credit crisis. 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, homeowners took cash out of their houses in the form of higher mortgages - under the assumption that values would continue to rise. Now that housing prices in the U.S. are falling, many people have seen that value of their home fall below what they owe, and some have been forced to simply walk away from their homes. -By Andrew Edwards, Dow Jones Newswires; 201-938-5973; Andrew.Edwards@dowjones.com (END) Dow Jones Newswires April 21, 2008 11:31 ET (15:31 GMT)

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