While there are a few encouraging signs coming from the economy, the percentage of borrowers defaulting on their loans is certainly not one of them. The S&P Dow Jones/Experian credit default indices indicate that defaults have been rising for the past three months, taking a slight jump in November and a larger jump in December. It must be noted, however, that compared to the same months from 2011, the default numbers are actually down.

This from Megan Hopkins’ piece on housingwire.com:

The indices national composite, which measures all consumer defaults, increased for three consecutive months in a row, reaching a 1.72% default rate in December. This compares to a default rate of 1.64% in November and a much lower rate of 1.55% in October. The first-mortgage default rate followed the same pattern, increasing from 1.47% in October to 1.58% in November, and then edging up again to 1.68% last month.

According to the chairman of the S&P Dow Jones indices, David Blitzer, September 2012 marked a post-recession low for consumer defaults, but since then the number has been climbing at an unsettling rate. He does note, though, that 2012 was an improvement on 2011 even with the rising numbers.

While the explanation for the spike could be as simple as money getting tight during the holidays, these rising default numbers certainly can’t be doing anything to add to the confidence of those in the lending business.

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