Los Angeles Shows Drop in Defaults
Nationwide decline also reported.
Defaults on loans can lead to a variety of circumstances, including lowered credit scores or a situation where a consumer considers filing bankruptcy.
However, a recent report from Standard & Poor's and Experian noted that a number of metropolitan areas - and the nation as a whole - saw default rates on loans improve in June. One of those was Los Angeles, which saw written off balances drop 4.31 percent when compared to May.
Furthermore, the companies noted that defaults declined 40.02 percent in the city when held up to June 2009. In all, bad loans accounted for 4.74 percent of balances in Los Angeles.
The U.S. showed the June index at 3.44 percent of existing loans being in default, a 4.49 percent improvement when compared to May.
"The data are consistent with reports that people continue to eschew debt and as the slow recovery from recession and financial turmoil continues," David Blitzer, managing director for S&P said.
Furthermore, the Federal Reserve Board has reported that total consumer credit has continued its drop, meaning consumers may be paying off their debts. However, it is also an indication that lenders are needed to write off more bad loans.
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