| Quote of the Month:
"The percent of Americans who were delinquent 30 days or more on their home mortgages dropped to 4.53% at the end of the fourth quarter of 2002, down 14 basis points from a year earlier."
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April 2003
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| Mortgage Delinquencies Down |
| The latest data from the Mortgage Bankers Association (MBA) provide some encouraging news about homeowner finances. The percent of Americans who were delinquent 30 days or more on their home mortgages dropped to 4.53% at the end of the fourth quarter of 2002, down 14 basis points from a year earlier.
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| Non-Mortgage Delinquencies Rise
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| Non-mortgage delinquencies conveyed a more negative picture of underlying consumer finances than did mortgage delinquencies at the end of 2002. The American Bankers Association (ABA) recently released its index of consumer loan delinquencies and found that most categories of loans experienced declining payment performance, relative to one year earlier. |
| Personal Bankruptcies Climb Through First Quarter
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| Creditors hoping for a stable bankruptcy environment in 2003 are disappointed. Statistics compiled from courthouse records by the National Bankruptcy Research Center reveal that through the first 13 weeks of 2003, personal bankruptcy filings are up 8.9% from the same period one year earlier. |
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| Sears Portfolio for Sale |
Sears, Roebuck and Co. announced in late March that part or all of its $30 billion credit card portfolio is for sale. Company CEO Alan Lacy indicated that the proceeds from the sale would allow the company to improve its balance sheet and focus resources (and investor attention) on its core retail business.
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| Retailer-Run Card Operations Shrinking |
| If Sears succeeds in finding a buyer for its entire card portfolio later this year, there may be a significant re-thinking on the part of the shrinking list of retailers who still own and operate their own portfolios. With over $22 billion in outstandings, the Sears proprietary card portfolio is nearly 10 times bigger than the next largest player remaining. |
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| The Quality of Credit Report Data |
| The lead article in the February issue of the Federal Reserve Bulletin is a masterful overview of consumer data and credit reporting.... This study is the first step in a major research effort of the staff of the Federal Reserve Board "to obtain more detailed and timely information on the debt status, loan payment behavior and overall credit quality of U.S. consumers." |
| Fannie and Freddie Concern Fed |
| Two articles by Patrick Barta in the Wall Street Journal chronicle the rising concerns about Fannie Mae and Freddie Mac.... The basic concerns are with the valuation of derivatives. |
| Auto Financing |
| Have you been thinking of buying a new car? How about a six-year loan with a low down payment with 1.9 percent interest? Columnist Jeff Green of Bloomberg News reports that a Ford dealer in Cuyahoga Falls, Ohio has increased his sales by 7 percent in February, in large part by offering customers very attractive credit terms. |
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| House Approves Bankruptcy Bill |
| Since 1997, Congress has been struggling with revisions to the bankruptcy system. Several versions have passed both the House and the Senate, only to stall in conference committee (in the process of resolving House and Senate differences) or suffer a pocket veto by President Clinton. There may now be some progress. |
| Restrict Sharing of Credit Data |
| Legislators in California are considering a bill that would require California banks and other financial institutions to obtain their customers' permission before sharing or selling personally identifiable data to unaffiliated third party organizations. |
| MasterCard Seeks to Split from Visa in Lawsuit |
| You may recall that several major retailers filed a suit against Visa and MasterCard back in 1996, alleging that the two firms had conspired to force them to accept both their debit and credit cards and that they had conspired to suppress rival debit card networks. Now, MasterCard has filed a motion urging that it should not be included with Visa and should have a separate trial. |
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