Tuesday, March 1, 2011
Mortgage Charge Off-Rates Have Declined Significantly
The Federal Reserve puts out data concerning charge off rates for all commercial banks in the United States. During 2010, the charge-off rates have been declining. You can expand the chart above by clicking on it, but you can see that the charge-off rate for commercial real estate (excluding farmland) has fallen to around 2%, as has that for residential mortgages---The drop off in credit card charge offs has been even steeper dropping from a peak of nearly 11% in Q2-2010 to 7.7% in Q4-2010.
Banks first must place non-performing mortgages in the delinquent portion of their books for several months before fully charging them off.