Second-lien home equity lines of credit (HELOCs) have experienced year-over-year delinquency rate increases in two of the past six months, the first such increases in nearly four years, according to data released by Black Knight Financial Services on Monday. With a few million more HELOCs set to amortize over the next couple of years, there will likely be plenty of refinancing opportunities as homeowners look for a way to handle the higher payments they are facing.
The increases were largely driven by an 87 percent spike in the number of delinquencies among 2005-vintage HELOCs that began amortizing in 2015 at their 10-year end-of-draw period. Heading into 2015, the 2005-vintage HELOCs made up about 17 percent of all active HELOCs in the United States. The delinquency rates among 2006-vintage HELOCs already appears to be increasing, having crept up by 5 basis points over the first quarter of 2016.
Fannie Mae announced on Monday it will release historical data on a portion of the loan modifications the Agency completed on delinquent loans. The purpose of publishing this data is to give the industry a greater ability to analyze the performance of loans that were modified in support of the Agency’s reperforming loan securitization program that was announced in April.