The June 2016 Equifax National Consumer Credit Trends Report analyzed data from over 220 million consumers, and found the first mortgage write-off rate in the U.S. to be 3.3 basis points of outstanding balances, while the total number of first mortgage defaults in June was 17,909, the lowest since January 2007. Amy Crews Cutts, senior vice president and chief economist at Equifax said quote the backlog of foreclosures from the financial crisis finally appears to be waning and write-offs are returning to historically-normal levels.
While the overall U.S. first mortgage write-off rate returned to historic lows, some areas remain elevated. For instance, at 12.9 basis points, the write-off rate in Puerto Rico is three times higher than the national average and in Nevada, the rate is twice as high at 6.6 basis points. For Home Equity Lines of Credit and home equity installment loans, write-offs, as a share of total balances, the year over year changes showed a minor increase in home equity installment loan write-offs from 7.6 basis points to 8.0 basis points as well as a decrease in home equity revolving lines of credit from 4.0 basis points to 3.4 basis points.
Since Airbnb’s launch in 2008, the home-sharing service has grown to currently include more than 2 million listings in 191 countries. Because of this, some home builders are developing new plans with the home-sharing industry in mind but for lenders, Airbnb may bring more trouble than anticipated, according to a recent post from Fannie Mae. The largest of which comes in the form of violating the terms of the resident’s mortgage agreement. Fannie Mae says that this can be possible when using a property purchased as a residential dwelling for short-term rentals could violate the mortgage agreement. Additionally, if the lender decides regular use as a short-term rental could cause the property’s value to decline, the lender could call the loan due, meaning the owner would need to pay off the balance or lose the house.