Equifax: Mortgage Write-Offs in Q1 2016 at Nine-Year Low
Consumers demonstrating strong repayment practices, while taking advantage of continued low-rate environment
News Release from Equifax
ATLANTA, May 10, 2016 – According to data from the April 2016 Equifax National Consumer Credit Trends Report, the total balance of write-offs year-to-date in March for first mortgages, home equity lines of credit (HELOCs), and home equity loans is $9.5 billion, a nine-year low for Q1 and a year-over-year decrease of 22.7 percent.
“Homeowners are in the best financial shape they’ve been in since well before the start of the Great Recession,” said Amy Crews Cutts, Senior Vice President and Chief Economist at Equifax. “Total mortgage debt is down over $1 trillion, owner’s equity is up to $12.5 trillion, nearly double the amount held in 2011, and low inventories of homes for sale are driving prices up at a modest pace. Moreover, the average interest rate on outstanding mortgage loans keeps falling as more and more homeowners refinance into rates below 4 percent, giving borrowers more spending capacity each month.
Lending standards remain exceedingly tight, with the median Equifax Risk ScoreSM on a new first mortgage running at 749 in the first quarter of 2016. On newly originated home equity lines of credit, known as HELOCs, the median credit score much higher at 788.”
The data also shows ongoing improvements in severe delinquency rates. Balances 90-days past due or in foreclosure and as a share of total balances, the year-over-year declines in March include:
- First mortgage: from 2.35 percent to 1.65 percent;
- Home equity installment loans: from 1.98 percent to 1.59 percent;
- Home equity revolving lines of credit: from 1.47 percent to 1.33 percent.
Additional data from the April 2016 Equifax National Consumer Credit Trends Report includes:
Home Equity Installment
- The total number of outstanding loans in March is 4.5 million, a decrease of 1.8 percent from same time a year ago;
- The year-over-year rate of decline in the total number of loans has slowed considerably. From March 2014-2015, the number of accounts decreased 10.6 percent; and
- Similarly, the total outstanding balances on home equity loans in March is $130.4 billion, a year-over-year decrease of 4.2 percent.
Home Equity Lines of Credit (HELOC)
- The total number of outstanding HELOCs in March is 11.0 million, a decrease of 3.2 percent;
- The total balances outstanding on HELOCs in that same time is $489.9 billion, a decrease of 3.9 percent; and
- The utilization rate on HELOCs (the balance owed divided by the credit limit) has fallen below 50 percent for the first time since 2008.
- The total number of first mortgages as of March 2016 is 50.2 million, a year-over-year increase of 0.6 percent;
- The total balances outstanding on first mortgages in that same time is $8.37 trillion, a year-over-year increase of 2.7 percent;
- The severe delinquency rate (as a share of balances 90-days past due or in foreclosure) is 1.65 percent, down from 2.35 percent same time a year ago; and
- Severe delinquencies are at the lowest level since September 2007, as a share of both outstanding loans and balances.
Equifax's National Consumer Credit Trends Report reveals population-level debt and lending insights, including originations, balances, number of loans, delinquencies and more from more than 220 million consumers.
Equifax powers the financial future of individuals and organizations around the world. Using the combined strength of unique trusted data, technology and innovative analytics, Equifax has grown from a consumer credit company into a leading provider of insights and knowledge that helps its customers make informed decisions. The company organizes, assimilates and analyzes data on more than 800 million consumers and more than 88 million businesses worldwide, and its databases include employee data contributed from more than 5,000 employers.
Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor's (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,200 employees worldwide.
Some noteworthy achievements for the company include: Ranked 13 on the American Banker FinTech Forward list (2015); named a Top Technology Provider on the FinTech 100 list (2004-2015); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2015); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015). For more information, visit www.equifax.com