The total balance of home finance write-offs, year-to-date through September, is $96.3 billion, representing a six-year low and a decrease of more than 22% from the same time a year ago, according to the latest Equifax National Consumer Credit Trends Report.
The report also finds that similarly, year-over-year changes in home financing total delinquencies (30-or-more days past due or in foreclosure) include the following:
áÂ Â Â First mortgage decreased 24.5% (from 7.94% to 6.00%);
áÂ Â Â Home equity installment decreased 21.9% (from 6.20% to 4.84%); and
áÂ Â Â Home equity revolving decreased 17.6% (from 3.24% to 2.67%).
Amy Crews Cutts, chief economist for Equifax, says, ‘Improvements in labor markets and rising home values are pushing down mortgage delinquency rates, and the outlook is very positive for continued improvement. We're now back to where we were in mid-2008 in terms of severely delinquent first mortgages, and current trends suggest we will be at pre-recession levels of severe delinquencies by the end of 2014."
Other highlights from the report include the following data:
áÂ Â Â Year-over-year, first mortgage REO rates decreased 27.9% in September to 1.71% – the lowest level in more than five years;
áÂ Â Â For the first time in more than five years, the total balance of first mortgage severe delinquencies (90-days past due or in foreclosure) is less than $300 billion – a decrease of more than 29% from same time a year ago; and
áÂ Â Â Of total severely delinquent first mortgage balances, loans opened over the three-year period between 2005 and 2007 represent 64% of these balances.
Home Equity Revolving
áÂ Â Â The total balance of new credit year-to-date in is $46 billion – a four-year high;
áÂ Â Â The total number of new loans year-to-date in July is 577,800 – a year-over-year increase of 16.7% and a four-year high;
áÂ Â Â In September, the total balance of home equity revolving loans is $497.2 billion – a decrease of 7.3% from same time a year ago and a five-year low. Similarly, the total number of loans outstanding in September is less than 10.5 million, a five-year low;
áÂ Â Â The total balance of severely delinquent home equity revolving loans in September is $8.5 billion – a decrease of more than 24% from same time a year ago and a five-year low; and
áÂ Â Â Of total severely delinquent home equity revolving balances, loans opened over the three-year period between 2005 and 2007 comprise 72% of these balances.
Home Equity Installment
áÂ Â Â The total balance of home equity installment loans is $136.2 billion – a decrease of 3.9% from same time a year ago, while the total number of loans outstanding is less than 4 million, which is a five-year low;
áÂ Â Â The total balance of home equity installment loans in foreclosure increased 15.5% (from $390 billion to $450 billion) month-over-month from August-September; and
áÂ Â Â In that same time, the total balance of severely delinquent home equity installment loans (90 days past due or in foreclosure) declined 8.4%, from $4.4 billion to $4.0 billion.
‘Generally speaking, transitions to deeper stages of delinquency are slowing, so, for example, fewer loans that are now 30 days late are transitioning to 60 days late,’ Cutts adds. ‘But we are also seeing acceleration in the transition rates from loans that have started the foreclosure process to being bank-owned in REO status. This acceleration primarily reflects reductions in judicial timelines in states where foreclosures have to go through court review.’