While default data for the closing month of 2019 is still a couple of weeks away from being released, S&P Dow Jones Indices and Experian previously shared their default metrics for November.
And the auto-finance metric remained below the cyclical peaks that analysts pinpointed during the past three years.
Data through November 2019 for the S&P/Experian Consumer Credit Default Indices showed the auto-default rate dropped 1 basis point on a sequential basis to settle at 1.02%. That’s also down from the high point of 2019 registered in September when the reading stood at 1.05%
The November auto default measurement also fell below the recent highs analysts spotted, including 1.11% registered in both October and November of 2017 as well as 1.09% in February of 2018.
Meanwhile, S&P and Experian reported that the November composite rate — a comprehensive measure of changes in consumer credit defaults — also rose 1 basis point to 0.94%.
Analysts indicated the bank card default rate increased 6 basis points to 2.94%, and the first mortgage default rate was unchanged at 0.77%.
S&P and Experian mentioned four of the five major metropolitan areas they track showed higher default rates in November compared to the previous month.
Miami generated the largest increase, climbing 22 basis points to 1.53%. The default rate for Los Angeles also posted a double-digit rise, increasing 12 basis points to 0.77%.
While the rate for New York climbed 7 basis points to 1.14%, the level for Dallas rose 4 basis points to 1.01%.
Conversely, the rate for Chicago softened 3 basis points to settle at 1.14%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
While a bit higher than the year-ago reading, the latest auto-finance default rate included among the S&P/Experian Consumer Credit Default Indices is on par with what the metric has been in October multiple times during the past five years.
This week, S&P Dow Jones Indices and Experian released its data through October and reported the auto default rate ticked down by 2 basis points on a sequential basis to land at 1.03%. Last October, the reading stood at 0.92%, making the year-over-year climb register at 11 basis points.
But looking back at the historical data offered by S&P and Experian, the information shows the latest figure is at or even below what analysts spotted for the 10th month of the year. For example, in October 2017, the reading came in at 1.11%, tying for the high point of the year. And for October 2016, it was 1.08%, the high-water mark for that year, too.
And for reference, the reading in October 2015 stood at 1.00%, and in October 2014, it came in at 1.05%.
Meanwhile, the latest composite rate — which represents a comprehensive measure of changes in consumer credit defaults — remained unchanged in October, holding at 0.93%.
Analysts also reported the bank card default rate fell 44 basis points to 2.88%. and the first mortgage default rate increased 4 basis points to 0.77%.
Looking at the October data by geography, three of the five major metropolitan statistical areas tracked by S&P and Experian each month showed higher default rates compared to last month.
New York produced the largest increase, climbing 11 basis points to 1.07%.
The default rate for Dallas rose 4 basis points to 0.97%, while the rate for Miami ticked up 1 basis point, to 1.31%.
The level for Los Angeles dropped 7 basis points to 0.65%, while the rate for Chicago dipped 2 basis points lower to 1.17%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
While still following cyclical patterns, auto-finance defaults in September climbed to the highest point so far this year, tying for the third-highest reading since 2014.
According to data through September compiled by S&P Dow Jones Indices and Experian, the auto component of the S&P/Experian Consumer Credit Default Indices jumped 7 basis points to 1.05%. The default rate has climbed 16 basis points during the past two months.
Historical data shows defaults typically rise during this portion of the calendar. Defaults hit their crescendo a year ago during December (1.03%). And in 2017, that five-year high arrived in October at 1.11%.
Meanwhile, the composite rate didn’t climb quite as much. The reading that represents a comprehensive measure of changes in consumer credit defaults ticked up just 1 basis point to 0.93%.
The bank card default rate fell 41 basis points to 3.32%, but the first mortgage default rate increased 4 basis points to 0.73%.
Looking at the data by location, three of the five largest metropolitan areas showed higher default rates in September compared to the previous month.
Analysts discovered Chicago produced the largest increase, jumping 14 basis points to 1.19%.
The default rates for New York and Miami each rose 2 basis points, to 0.96% and 1.30%, respectively.
S&P and Experian noticed the rate for Dallas was unchanged at 0.93%.
Finally, Los Angeles was the only among these five cities with a decrease in default rates, dipping 5 basis points to 0.72%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
The noticeable upturn in defaults finance companies might be used to seeing from July into August unfolded again this year, according to the S&P/Experian Consumer Credit Default Indices.
Data through August from S&P Dow Jones Indices and Experian showed the auto loan default rate climbed 9 basis points to 0.98%, mimicking a track that analysts have seen several times during this segment of the year.
After remaining steady last year, S&P and Experian reported the July to August upward movement in 2017 was 10 basis points after coming in at 8 basis points in 2016. The rise during this stretch in 2015 was just 4 basis points. But in 2014, it was also was 8 basis points.
The latest increase in auto defaults helped to push the composite rate to a repeat of the highest point of 2019.
That composite rate, which represents a comprehensive measure of changes in consumer credit defaults, jumped 7 basis points to 0.92%. Analysts pegged the reading at that figure in February and March, as well. However, S&P and Experian data indicated that the composite figure has stayed below 1% each month since March 2015.
Elsewhere in the August data, analysts said the bank card default rate fell 4 basis points to 3.73%, while the first mortgage default rate increased 7 basis points to 0.69%.
Meanwhile, S&P and Experian noticed four of the major metropolitan areas they track for this report showed higher default rates in August compared to July.
Chicago and Dallas posted the largest increase, each rising 10 basis points, to 1.05% and 0.93% respectively.
The default rate for New York climbed 5 basis points to 0.94%, while the rate for Los Angeles edged up 3 basis points to 0.77%.
Miami was the only metro area of the top five with a decrease in default rates as analysts spotted a 6-basis point drop to 1.28%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
Steady is an adjective that certainly summarizes the latest default data discovered by S&P Dow Jones Indices and Experian.
According to the latest update released on Tuesday, all of the segments included in the S&P/Experian Consumer Credit Default Indices remained unchanged in June compared to the previous month.
Auto defaults held the line at 0.87%, marking the second time this year that the reading stayed the same on a sequential basis. For both March and April, analysts pegged auto defaults at 0.94%.
A year ago, S&P and Experian said auto defaults checked in at 0.93%.
Meanwhile the June composite rate — a comprehensive measure of changes in consumer credit defaults — remained unchanged at 0.83%.
Analysts added the bank card default rate held at 3.90%, and the first mortgage default rate was unchanged at 0.59%.
While the overall readings marked time in June, S&P and Experian spotted some movements when examining the five largest U.S. markets. Three of the major metropolitan statistical areas showed lower default rates compared to last month.
Los Angeles posted the largest decrease, dropping 7 basis points to 0.61%.
The default rate for New York declined 4 basis points to 0.87%, while the rate for Chicago fell 2 basis points to 0.88%.
The rate for Miami increased 6 basis points to 1.43%, while the rate for Dallas climbed 5 basis points higher to 0.82%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
Auto defaults remained below the 1% mark in May, according to the latest information assembled by S&P Dow Jones Indices and Experian.
Analysts noticed the May auto default reading dropped 7 basis points to settle at 0.87%. Auto defaults have declined 12 basis points since the beginning of the year.
The May composite rate within the S&P/Experian Consumer Credit Default Indices fell 5 basis points from the previous month to land at 0.83%. That rate represents a comprehensive measure of changes in consumer credit defaults.
Analysts determined the bank card default rate rose 7 basis points to 3.90%, while the first mortgage default rate dipped 6 basis points lower to 0.59%.
Moving on to the large markets S&P Dow Jones Indices and Experian watch for each monthly update, the firms four of cities posted lower default rates in May compared to April.
Dallas generates the largest decrease, moving 10 basis points lower to 0.77%. The default rate for New York dropped 7 basis points to 0.91%, while the rate for Chicago fell 6 basis points to 0.90%.
Los Angeles’ default rate edged 1 basis point lower to 0.68%.
Miami was the only city with an increase, ticking up 5 basis points to 1.37%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
Only once during the past 12 months has the auto finance default rate topped 1%. And the April reading remained steady on a sequential basis.
This week, S&P Dow Jones Indices and Experian released data through April for the S&P/Experian Consumer Credit Default Indices. The April auto reading stayed at 0.94%, which is the same as March and 5 basis points lower than April of last year.
This past December marked the only time in the past 12 months that the auto default rate ticked above 1%. That’s when it jumped sequentially by 10 basis points to 1.03% before dropping back to 0.99% in January.
And with many experts and outlets looking back 10 years when the auto-finance industry navigated its way through the Great Recession, S&P and Experian data showed that the auto default rate stood at 2.29% before topping out in October 2009 at 2.74%.
Turning back to current times, analysts reported the composite rate — a comprehensive measure of changes in consumer credit defaults — fell 4 basis points in April to settle at 0.88%.
The bank card default rate rose 15 basis points to 3.83%.
The first mortgage default rate dipped 5 basis points lower to 0.65%.
S&P and Experian went on to mention four of the major metropolitan statistical areas showed lower default rates in April compared to the previous month.
Miami registered the largest decrease, declining 26 basis points to 1.32%.
The default rate for New York dropped eight basis points to 0.98%, while the rate for Dallas fell 7 basis points to 0.87%.
Los Angeles produced a default rate of 0.69% in April, down 1 basis point from the previous month.
Chicago was the only city with an increase, edging 1 basis point higher to 0.96%.
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
Maybe now that both the first quarter and Tax Day are both in the rear-view mirror, perhaps the handwringing over the delinquency rate spotted at the end of 2018 can be completely squashed based on the newest default data shared on Tuesday by S&P Dow Jones Indices and Experian.
The auto finance reading of the March S&P/Experian Consumer Credit Default Indices dropped both on a sequential and year-over-year basis. Analysts pinpointed the March rate at 0.94%, which is 5 basis points lower than the previous month and 11 basis points below the year-ago level.
David Blitzer is managing director and chairman of the index committee at S&P Dow Jones Indices. Blitzer also pointed out that auto-finance defaults have been flat or decreasing since December, resulting in composite levels which have been little changed in first three months of 2019.
“Earlier concerns about auto loan defaults are behind us as seen in stable to lower default rates,” he said in a news released that accompanied the latest data.
Meanwhile, analysts determined the March composite rate — which represents a comprehensive measure of changes in consumer credit defaults — stayed unchanged from the previous month at 0.92%.
S&P and Experian went on to note the first mortgage default rate also remained unchanged in March, holding at 0.70% while the bank card default rate rose 20 basis points to 3.68%.
Looking by geography, analysts found that four of the largest major markets showed higher default rates in March compared to previous month.
Los Angeles produced the largest increase, rising 19 basis points to 0.70%. The default rate for Dallas climbed 4 basis points to 0.94%, while the rate for Chicago increased 3 basis points to 0.95%.
New York’s default rate edged 1 basis point higher to 1.06%.
Miami was the only city exhibiting a decrease, dropping 49 basis points to 1.58%.
Blitzer acknowledged March marked the fourth consecutive month where bank card default rates increased, though the rate still remains lower than it was one year ago.
“The economy and consumer spending are experiencing moderate growth with few significant consumer credit risks,” Blitzer said. “Sales of existing and new homes slowed in 2018, and mortgage rates pulled back slightly. Mortgage defaults should continue at their currently low levels.
"Most analysts, as well as the Federal Reserve, expect economic growth to continue at about 2%, somewhat slower than 2018 with minimal chance of a recession this year,” he continued.
“The movements of bank card credit defaults since 2015 exhibit a weak seasonal pattern: Default rates tend to peak in the second quarter and then decline slightly with a trough in the second half of the year. There is also a modest uptrend in default rates since late 2015,” Blitzer went on to say.
“In the 2015 fourth quarter, bank card defaults were 2.72% rising to 3.33% in the 2017 fourth quarter. Last year’s fourth quarter dipped to 3.17% before the rise resumed with 3.53% in the first quarter this year. While this pattern is becoming clear, there is not enough data yet to confirm the seasonal pattern statistically,” he added.
With all of the recent hubbub over delinquencies, auto finance defaults are remaining stable so far this year.
S&P Dow Jones Indices and Experian released data through February for the S&P/Experian Consumer Credit Default Indices, and the auto component remained unchanged at 0.99 percent.
In fact, the latest reading is actually 10 basis points lower based on a year-over-year comparison. The rate also has been below 1 percent for 10 of the past 11 months.
Meanwhile, analysts discovered the February composite rate that represents a comprehensive measure of changes in consumer credit defaults ticked up 2 basis points on a sequential basis to 0.92 percent. The reading stayed 4 basis points lower than the year-ago level.
S&P and Experian went on to note the bank card default rate rose 6 basis points to 3.48 percent, while the first mortgage default rate ticked up 1 basis point to 0.70 percent.
After seven straight months of decline, the latest update indicated bank card default rates now have increased for three consecutive months. This upward trend has been the primary contributing factor to the concurrent increase in the composite default rate, which has seen its rate increase for five straight months.
All default rates are lower compared to 12 months ago, according to S&P and Experian.
Turning to their data based on geography, analysts noticed four of the major market they watched monthly showed higher default rates in February compared to the previous month.
The rate for New York increased 6 basis points to 1.05 percent, while the rate for Chicago rose 4 basis points to 0.92 percent.
The default rate for Los Angeles was up 2 basis points to 0.51 percent, while the rate for Dallas inched 1 basis point higher to 0.90 percent.
The rate for Miami bucked the February trend, decreasing 12 basis points to 2.07 percent.
David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, reviewed the latest data and broader trends and offered this assessment.
“This month’s data show that four of the five cities tracked as well as all consumer credit default categories were higher in February,” Blitzer said. “This is more of a seasonal shift than a sign of rising default rates. Over the last several years, December, January and February have all experienced increases in default rates across cities and loan categories. Further, none of the figures suffered large increases compared to their levels of one year ago.
“Retail sales saw strong gains in January and auto sales continued at an annual rate of about 16.5 million vehicles. Any upward pressure on mortgage defaults stemming from the rise in home prices over the last few years is being offset by weakened sales of new and existing homes,” he continued.
“The overall economy is not expected to put any pressure on consumers’ financial condition,” Blitzer went on to say. “Employment and job growth continue to be quite strong and wages have recently seen some gains. The economy is settling into a stable growth path with anticipated GDP gains of 2 percent to 2.5 percent by most analysts in 2019.
“Two perennial sources of anxiety for economists and consumers are inflation and the unemployment rate,” he added. “Inflation remains around 2 percent and the unemployment rate is at or below 4 percent in recent data. As long as these figures remain steady, the Fed isn’t likely to shift interest rates and consumers should not have difficulty paying their bills, which could keep default rates close to current levels.”
Jointly developed by S&P Indices and Experian, analysts noted the S&P/Experian Consumer Credit Default Indices are published monthly with the intent to accurately track the default experience of consumer balances in four key loan categories: auto, bankcard, first mortgage lien and second mortgage lien.
The indices are calculated based on data extracted from Experian’s consumer credit database. This database is populated with individual consumer loan and payment data submitted by lenders to Experian every month.
Experian’s base of data contributors includes leading banks and mortgage companies and covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.
More consolidation in the recovery space arrived late on Tuesday as Automotive Intelligence Council member MBSi Corp. increased its collection of resources.
The provider of compliance-enabled repossession assignment management software and vendor management software announced the acquisition of My Recovery System and Vendor Transparency Solutions’ platforms. The company highlighted this acquisition allows MBSi to offer a single software ecosystem for repossession assignment management and vendor compliance management to recovery agents, forwarders and auto-finance companies.
The integration of My Recovery System’s back-office platform and Vendor Transparency Solutions’ web-based compliance management system with MBSi’s assignment volume, operating excellence and talent formalized what the company described as a “game-changing component” of MBSi’s overall solutions strategy.
“We are thrilled to be working with the My Recovery System and Vendor Transparency Solutions platforms and teams to provide a seamless software solution for the recovery industry,” MBSi president Cort DeHart said in a news release.
“By capitalizing on these easy-to-use platforms, we will be able to bring new efficiencies to the industry with a seamless software solution that includes routing, full back-office and compliance management. This, coupled with the talent of the teams, sets us apart to deliver real results,” DeHart continued.
Two leaders from My Recovery System and Vendor Transparency Solutions also described what the transaction means.
“I’m excited to be part of a growing company where designs and strategies bring efficiency and transparency to the auto finance recovery industry,” said Jeff Koistinen, founder and president of My Recovery System. “MBSi’s commitment to the recovery agents ties back to our collective mission to exceed the needs of agents.”
Vendor Transparency Solutions founder and president Max Pineiro added, “I couldn’t be happier to join the MBSi team as we work together to deliver next generation compliance management platforms for recovery agents, forwarders and lenders.”
MBSi indicated its teams will immediately begin working to integrate the platforms to provide data and secure access of sensitive consumer information. MBSi also said it will continue to partner with RISC, which provides vendor vetting, compliance training and lot inspection services.
MBSi is hosting a recovery agent user conference and appreciation event on April 17 at Texas Live!, an entertainment venue in Arlington, Texas, starting at 3 p.m. CT. The user conference is exclusive to recovery agents to learn more about the new platform, pricing and how to get started.
Recovery agents can register for the event here.
