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Research shows dip in consumer defaults

Jan 18, 2011 Brian Bradley

The increasing number of consumers aware that they must control their debt played a part in a decline in consumer defaults during December, according to new data from Standard & Poor's and Experian. Figures indicated respective dips in the monthly default rates for first and second mortgages to 2.9 percent and 1.7 percent. Additionally, auto loan defaults fell to 1.68 percent, down from 1.76 percent the previous month. The rates may have a positive impact on consumer credit reports as home owners and credit card holders continue to dig themselves out of enormous debt. "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," David M. Blitzer, managing director and chairman of the Index Committee for S&P, said in a statement. The data indicates that the default rate varied by metropolitan region. Studying the five largest metropolitan areas, the study revealed fewer defaults in Los Angeles and Chicago, which saw experienced respective declines of roughly 3 percent and 3.1 percent. Miami and New York rates fell to 10.15 percent and 3 percent, respectively. Dallas had the only increase, jumping to 2.21 percent.