Equifax: 2015 Not A Bad Year For Mortgage Originations

Despite some major headwinds, 2015 was a fairly good year for mortgage lending, according to Equifax’s National Consumer Credit Trends Report.

The report shows that the total balance of new first mortgages originated in 2015 was $1.82 trillion, an increase of 42.9% compared with 2014.

A total of 7.71 million mortgages (purchases and refinances) were originated – an increase of 31.6% and the highest number of loans originated in seven years.

Of the $1.82 trillion originated, about $59.7 billion went to subprime borrowers, defined as borrowers with a FICO score of 620 or below. That’s an increase of 41.3% compared with 2014.

More than 366,900 loans went to subprime borrowers last year – an increase of 25.2%. It also represents about 10% of all loans originated.

The average FICO score for a subprime borrower was about the same as 2014, according to the report. Thus, credit standards didn’t really loosen that much in 2015.

“We saw a nice jump in mortgage lending in 2015 that was driven by both rising home-purchase activity and solid refinancing volumes,” says Amy Crews Cutts, senior vice president and chief economist at Equifax, in a statement. “While low interest rates are helping, continued gains in employment and consumer confidence are key.

“What we are not seeing is any meaningful loosening of underwriting, at least with respect to credit scores,” she adds. “The median credit score on new first mortgages in the fourth quarter of 2015 was 750, and 90 percent of first mortgage borrowers had a score in excess of 646 – these values are essentially unchanged for the past three years.”

More than 791,900 new home equity installment loans were originated in 2015 – an increase of 26.7% compared with the previous year. The total balance of home equity installment loans originated in that same time was about $26.5 billion, an increase of 20.8%.

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