Notice a few things.
1.) Defaults now are higher than they were in 2002-2003 at the beginning of this expansion.
3.) '02-'03 were the first two full years of this expansion.
That means sub-prime mortgage delinquencies are higher now -- 6 years into the expansion -- than they were at the beginning of the expansion.
A simple explanation may be delinquency rates were coming down in 20-03. This is possible. However, the fact we are six years into an expansion and delinquency rates are this high may indicate other problems -- such as the effect of lending money to everybody who has a pulse.
2 comments:
Do you think the changes in bankruptcy law might have had some effect on the willingness to lend to the subprime market?
That's an interesting point and one I hadn't considered. Off the top of my head, I'd say yes. The new laws make it harder to be absolved of debt, instead making it easier for creditors to get their money back albeit over a longer period of time.
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