So what does this all mean for banks?
Improvement in the economy has already led to a strong improvement in credit quality. So overall delinquencies have been declining and are low.
In mortgages, recent originations have been of strong quality, so the new problem loan rates are low. But the TransUnion study also shows that consumers, regardless of when the loan was originated, are now placing more importance in paying their mortgage.
So this might have some implications on how they reserve for future mortgage losses.JPMorgan Chase (JPM) recently said it would release $500 million in reserves for credit card losses in the second half of 2013. It would also release $1.2 billion in mortgage loss reserves. Still, this data was end of 2012 and while the housing market has recovered, things could change if the recovery falters. -- Written by Shanthi Bharatwaj in New York. >Contact by Email. Follow @shavenk
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