July 7 (Bloomberg) -- Late payments on home-equity loans rose to a record in the first quarter as 18 straight months of job losses and a slumping economy left more borrowers unable to pay their debts, the American Bankers Association reported.
Delinquencies on home-equity loans climbed to 3.52 percent of all accounts in the quarter from 3.03 percent in the fourth and late payments on home-equity lines of credit climbed to a record 1.89 percent, the group said. An index of eight types of loans rose for a fourth straight quarter, to 3.23 percent from 3.22 percent in October through December, the group said.
“The number one driver of delinquencies is job loss,” James Chessen, the group’s chief economist, said in an e-mailed statement. “Delinquencies won’t improve until companies start hiring again and we see a significant economic turnaround.”
The U.S. economy lost an average 691,000 jobs a month during the first quarter, and has cut about 6.5 million positions since the recession began in December 2007. Unemployment climbed to 9.5 percent in June, a 26-year high, the Labor Department said July 2. President Barack Obama last month predicted unemployment will reach 10 percent this year.
