Defaults Slow, but Don't Call It a Comeback

Loan delinquencies declined in the second quarter, but the temporary aid provided by government stimulus checks means that the credit crunch could be far from over, analysts say.

Several analysts this week have crunched the numbers on the second-quarter loan landscape and found some encouraging trends. A sample of second-quarter delinquency trends at 47 large and mid-size banking institutions shows the median delinquency ratio to total loans was 1.07%, down slightly from 1.10% in the first quarter, according to a report last week by boutique investment firm Stifel Nicolaus.

Compared another way, delinquencies on average rose only 2 basis points to 1.20% from the quarter before, so says the report. ...