National default rates increased in December

S&P/Experian recently reported that most loan types saw an increase in default rates during December, except bank card default rates, which declined from 4.91 percent in November to 4.60 percent in December. However, mortgage default rates increased to 1.33 percent from 1.17 percent for the month, marking the fourth consecutive month of increase in default rates.

David Blitzer, managing director and chairman of the S&P index committee, said the data reflects the recent weakness in home prices.

"Since August, first mortgage default rates have rise from 1.92 percent to 2.19 percent," said Blitzer.

However, continually declining mortgage rates are sparking an increase in refinancings which could help many homeowners avoid defaulting on their home loans or foreclosure. Many mortgage lenders all over the country are experiencing high numbers of borrowers looking to take advantage of the mortgage rates anyway they can, according to the Mercury News.

"We've had a huge increase," Andrew Soss of Stewart and Soss Mortgage in San Jose, New Mexico, told the source. "I'd say over the month, we've had a 40 percent increase in applications."

More News