The Foreclosure Report

Bankers: 'It's A Different World Now'

The Associated Press reports on personal debt. "Late payments on credit card bills edged up this past spring, when high energy prices were squeezing the finances of some people and making it hard to pay bills on time. The American Bankers Association reported Wednesday that the percentage of credit card payments 30 or more days past due increased to 4.41 percent in the April-to-June quarter, up slightly from 4.40 percent during the January-March period."

"'High gas prices and Federal Reserve interest-rate hikes have left consumers with less money in their pockets. As a consequence, consumers have less money leftover to meet all their expenses, including paying back their loans,' said James Chessen, the association's chief economist, in explaining the increase in late payments in the second quarter.

"The cooling of the once-hot housing market, meanwhile, has important implications on consumers and the overall economy, Chessen said. Consumers who watched their homes rise rapidly in value over the last several years were inclined to spend and borrow against their homes, treating them like ATMs, to support their spending ways. But home prices have since lost altitude."

"The National Association of Realtors reported Monday that the annual price of existing homes declined in August for the first time in more than a decade. 'Up until now, rising home values have increased wealth, been a source of liquidity for borrowers and allowed consumers to spend out of savings,' Chessen observed. 'It's a different world now, and consumers will need to be more careful in managing their finances.'"

posted by Ben Jones @ 2:47 PM