CoreLogic Sees Signs of Credit Cracks; Rates Unchanged Ahead of Fed Week

CoreLogic Sees Signs of Credit Cracks; Rates Unchanged Ahead of Fed Week

Here we go again? Sam Khater, CoreLogic's deputy chief economist, says loan performance is beginning to show some cracks in what has been a near perfect veneer. This might be an early signal of a downturn in the credit cycle. Khater is not issuing a warning, merely alerting those who should be watching such things to pay attention. He writes, in an article in the CoreLogic Insights blog, that a typical economic expansion and recession are strongly driven by loan performance. When times are good, lenders take on more marginal borrowers then tend to become more conservative when loan performance begins to deteriorate. That often exacerbates an economic downturn. Loan performance across the four major types of loans (agricultural, business, personal consumption, and real estate) all improved throughout