Increased mortgage defaults pushed the overall consumer default rate up in December for the third consecutive month.  The national S&P Experian Consumer Credit Default Index hit a post recession low of 1.46 percent in September but then went to 1.55 percent in October, 1.64 percent in November, and 1.72 percent in December. 

The index for first mortgage defaults showed the same pattern.  After reaching a post-recession low of 1.36 percent in September it increased to 1.47 percent, 1.58 percent, and 1.68 percent over the next three months.  The second mortgage default rate, which was at a historic low of 0.62 percent in November rose to 0.69 percent in December.  Default rates on non-mortgage debt performed a little better; auto loan defaults were unchanged from November at 1.09 percent while bank card defaults dropped five basis points to 3.53 percent.

"Overall, 2012 showed improvement in consumer credit quality", says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "However, fourth quarter consumer default rates reversed some of the recent declines and pushed the composite default rate above its level of last May. The principal culprits were first and second mortgages. Default rates for auto loans were roughly stable over the year and default rates for bank cards continued to drop. All loan types remain below their respective levels a year ago."

"All five cities we cover showed increases in their default rates in December. The major increases were Miami, up 41 basis points, Chicago up 27, and Los Angeles up 24 basis points. New York and Dallas were marginally higher by four and one basis points. Miami had the highest default rate at 3.07% and Dallas - the lowest at 1.26%. All five cities remain below default rates they posted a year ago, in December 2011."