Costa Mesa, Calif., Oct. 7, 2008 — Experian®, a global information services company, today announced the results of a study that analyzed delinquency trends across consumer risk segments to uncover the shifting patterns in consumer payment behavior and the geographies most affected. The changing delinquency trends highlight the severe affect of the mortgage crisis on subprime consumers and its continuing permeation into the prime consumer segment. The study’s findings suggest that the conventional wisdom — consumers who hold a mortgage are less risky than those who don’t — may need to be rethought in light of the mortgage market turmoil.
The first quarter of 2005 has been identified as a pivotal point in time when analyzing delinquencies. Consumers with mortgages originated prior to 2005 can be said to perform closely to historical statistical patterns accepted within the industry. However, for consumers with mortgages originated January 2005 and after, the delinquency pattern begins to shift. The study identifies the shift in overall delinquencies, first mortgage delinquencies, delinquency progression and foreclosure trends.
“We conduct these studies to provide the most relevant data possible to organizations that extend credit and loans to American consumers,” said Kerry Williams, group president of Experian’s Credit Services and Decision Analytics. “If organizations feel confident that they have the right data to make sound decisions, it will enable them to maintain the flow of credit to consumers in the form of mortgage loans, credit cards and personal loans.”
Some of the key findings of the study include:
1. One out of four subprime adjustable-rate mortgages originated after 1Q05 are at 60 days past due
2. Prime consumers with adjustable rate mortgages originated after 1Q05 have experienced a 286% increase in the rate of bankcard delinquency
3. Of all mortgages originated after 1Q05 that entered foreclosure, more than 35 percent are in California
The data used for the analysis was compiled from Experian consumer credit data. The statistically valid sample was randomly selected and followed through all time periods of the analysis to provide a true progression of delinquency trend among the sample.
Experian plc is a global leader in providing information, analytical and marketing services to organizations and consumers to help manage the risk and reward of commercial and financial decisions.
Combining its unique information tools and deep understanding of individuals, markets and economies, Experian partners with organizations around the world to establish and strengthen customer relationships and provide their businesses with competitive advantage.
For consumers, Experian delivers critical information that enables them to make financial and purchasing decisions with greater control and confidence. Clients include organizations from financial services, retail and catalog, telecommunications, utilities, media, insurance, automotive, leisure, e-commerce, manufacturing, property and government sectors.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. It has corporate headquarters in Dublin, Ireland, and operational headquarters in Costa Mesa, Calif., and Nottingham, UK. Experian employs approximately 15,500 people in 38 countries worldwide, supporting clients in more than 65 countries around the world. Continuing sales for the year ended March 31, 2008, were in excess of $4 billion.
For more information, visit Experian plc’s Web site on http://www.experianplc.com.
Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein may be the trademarks of their respective owners.
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