The historical low delinquency rate was 3.9 percent in the late 1970s, while the historical high for delinquencies was 6.07 percent [in 1985]. Right now it's right in the middle between the all-time low and the all-time high, and we're just coming out of a recession.

We expect to see a modest rise in delinquencies in the quarters ahead.

The increase of delinquencies is not surprising. We have been expecting an up-tick in delinquencies due to a number of factors.

The household saving rate has fallen to less than 1 percent, quite low in its range of historical variation, ... If households, on net, take steps to return the saving rate closer to the middle of that range, which, I might add, would provide welcome support to capital accumulation, then a sustained period in which consumption grows more slowly than income would result.

The first stumble is really expensive. If you already have a low score and there's a delinquency, your score won't drop by as far.

The effects of Hurricane Katrina in Louisiana and Mississippi are reflected in the overall level of national delinquencies.