Home finance balances written off in the first quarter totaled $43.1 billion, nearly 23% below the $55.4 billion level recorded in the first quarter of 2012, according to new data from Atlanta-based Equifax.
By loan type, year-over-year change in home finance write-off rates between the first quarters of last year and this year showed declines in home equity revolving lines of credit (down 44.1%), home equity installment loans (down 32.9%) and first mortgages (down 17.6%).
‘Overall home finance balances decreased to $8.38 trillion in March 2013 from $8.64 trillion same time a year ago,’ says Equifax Chief Economist Amy Crews Cutts. ‘The decline is due to write-offs from foreclosures, as well as from consumers paying down balances when refinancing, known as cash-in refinancing, shortening terms when they refinance their loans or making extra principle payments each month for faster amortization; some have even paid off their mortgages entirely. The share had been running 50-50 until recently when it has shifted to a 60-40 split with write-offs dominating. This shift is important as increased home purchases are finally leading to more demand for mortgage credit and may soon stop the decline in mortgage debt outstanding.’