Jan 7, 2009 6:50 pm US/Eastern
Working Triage In The Credit Crisis
NEW YORK (CBS News) ―
The recession gets the credit for lower oil prices - and for more Americans falling behind on their loan payments. A new report says that, in the third quarter of last year, nearly 3 percent of loans were at least 30 days late - the most since they started keeping track 28 years ago. CBS News business correspondent Anthony Mason reports.
In Dallas, the Consumer Credit Counseling Service is hiring. It is adding 25 counselors, because calls for help, which soared by more than 1/3 last year, are already jumping again this year.
"We're probably expecting another 20 to 25 percent increase in call volume," said Todd Mark of the Consumer Credit Counseling Service.
The problem started with mortgages. But now, delinquencies on auto loans and home equity loans have reached record levels. And a new study says its spreading to credit cards.
"Basically, people are falling further behind?" Mason asked.
"On their credit card, yes. And they're defaulting more. And they're paying less," said Michael Dean of Fitch Ratings.
Since July, the study found, balances that are more than 60 days past due have risen more than 34 percent. And, 5 percent of all credit card borrowers are now more than two months behind.
At the credit counseling center in Dallas, the typical client, who a year ago had $21,000 in debt, is now coming in with $30,000 in debt.
"And as we're seeing unemployment go up to 7 percent and beyond, it's not just the debt level, but its the lack of income to support the debt," said Mark.
He says the service counsels clients to call for help as soon as they sense they're in trouble.
"We really serve as a triage center," he said.
But these credit doctors say they're going to need more help in the emergency room.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Timeline: U.S. Credit Crunch & Financial Failures
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