Mortgage and home equity lines of credit delinquencies are expected to rise, according to predictions by bank risk professionals polled by the Professional Risk Managers’ International Association in a survey sponsored by FICO (NYSE:FICO).
For the third straight quarter, risk managers don’t seem to expect delinquency rates for mortgages, home equity lines, credit cards, auto loans, small business loans, and student loans to improve any time soon, according to PRMIA.
Nearly half, at 47.1%, believe that mortgage delinquencies will increase, either somewhat or significantly—slightly more than was predicted during the previous quarter’s survey. Additionally, slightly more think that home equity line delinquencies will increase, at 44.3% in the fourth quarter of 2011 compared to 40% last quarter.
“Overall, delinquency predictions paint a somewhat pessimistic picture,” the report says. “Risk managers continue to express concern that delinquency rates are high and likely to grow higher.”
Looking ahead, while nearly one third of respondents think it’s “likely” that the U.S. will have negative GDP growth in 2012, more than half (51.7%) think it’s “unlikely.” And a little less than half (45.7%) think that the influence of Chinese consumers will surpass U.S. consumer influence within the next decade, compared to 19.5% who think this will happen sooner, within the next five years.
Written by Alyssa Gerace