Decline in mortgage defaults reported

Data through December 2010, released today by Standard & Poor's and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed a decline in monthly default rates for first and second mortgages to 2.93% and 1.74% respectively. Auto loans experienced the biggest decline this month to 1.68% from 1.76% in November. The bank card index declined slightly to 6.73% default rate.

"Default rates across the four major categories of consumer borrowing declined in December from November and from a year earlier. Nationally, consumers continue to gradually improve their financial condition," commented David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P. "Separately, data from the Federal Reserve shows that bank card credit declined through November. Debt-service ratios, the proportion of disposable income that goes to paying debt, continues to decline. On a regional basis, the five cities we cover suggest that the Sunbelt continues to see greater than typical default rates."

Consumer credit defaults varied across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release Los Angeles and Chicago experienced a decrease in defaults this month to 3.07% and 3.13% respectively. Dallas was the only one that had increased in default rates to 2.21%. Miami and New York declined slightly to 10.15% and 3.01% respectively.

The table gives summary results for December 2010 for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

S&P/Experian Consumer Credit Default I ndices National Indices
Index	December Index Level	Change from November 2010	Change from December 2009
Composite	3.01	-3.94%	-37.01%
First Mortgage	2.93	-4.34%	-38.57%
Second Mortgage	1.74	-3.07%	-50.76%
Bank Card	6.73	-1.77%	-17.68%
Auto Loans	1.68	-4.45%	-36.85%
Source: S&P/Experian Consumer Credit Default Indices Data Through: December 2010

The second table provides the S&P/Experian Consumer Default Composite Indices for five selected metropolitan statistical areas:

Metropolitan Statistical Area	December Index Level	Change from November 2010	Change from December 2009
New York	3.01	-0.99%	-31.03%
Chicago	3.13	-6.13%	-39.87%
Dallas	2.21	0.37%	-35.38%
Los Angeles	3.07	-5.82%	-51.69%
Miami	10.15	-1.13%	-26.02%
Source: S&P/Experian Consumer Credit Default Indices Data Through: December 2010

Jointly developed by Standard & Poor's and Experian, the S&P/Experian Consumer Credit Default Indices are published on the third Tuesday of each month at 9:00 am ET. They are constructed 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.