Late Payments

Some encouraging financial news has emerged from the American Bankers Association. The group reports that late payments on credit cards decreased 4.39% in the 2nd quarter of the year. It's the lowest rate recorded since the close of 2005. It also marks a decrease from the 1st quarter rate, which declined 4.41%.
Yet, at the same time, it appears that people are having trouble managing their home equity loan payments. Delinquencies on such lines of credit rose in the 2nd quarter to the highest rate in more than 5 years.
Still, the bankers' association states that, overall, consumers managed fairly well in the spring, despite the troubles caused by the collapse of the subprime loan sector. That's because the unemployment rate remained low and wages grew, lessening the blow of the housing crisis.
However, employment did take a downturn in August, when the total number of jobs fell for the 1st time in 4 years' time. If the job picture continues to darken, consumers could have difficulty paying their credit card bills on time.
Meanwhile, delinquencies on auto and boat loans and home improvement loans dropped 2.27% in the 2nd quarter—an encouraging sign, according to economists. Experts are predicting that the Federal Reserve's decision to cut a benchmark interest rate should aid both prospective homebuyers who are hoping to secure a loan and current homeowners faced with the financial struggle posed by adjustable-rate mortgages. Consumers with credit card debt and those with home equity lines of credit should also receive some relief, thanks to the interest rate reduction.
Home foreclosures have soared over the past year, increasing the risk of recession. Experts say that they do not foresee an improvement in the real estate market until some time next year. That could be too late for homeowners who are already facing the possibility of foreclosure