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Outstanding Loans, Delinquencies Remain Flat

The latest Consumer Trends report from Equifax showed that first mortgage early delinquency rates in Q4 were largely where they were a year earlier, but loans in serious delinquency were down by about 1 percent.

The number of outstanding loans at the end of Q4 2016 remained at a steady 50 million, where they’ve been, more or less, since early 2014. The percentage of those loans in early-stage delinquency‒‒30 to 89 days past due‒‒closed the year at about 1.3 percent. That number barely fluctuated over 2016 and is almost identical to the end of 2015.

The total balance of outstanding first mortgages is $8.43 trillion, a year-over-year increase of 2.4 percent.

However, the percentage of first mortgages in serious default‒‒90 or more days past due‒‒has been steadily declining since 2012, when serious delinquency rates hovered just below 2.5 percent. Serious delinquency rates ended 2016 at 1.26 percent, down from close to 1.77 percent a year earlier.

The numbers reflect what Equifax chief economist Amy Crews Cutts said was a strong performance in the first mortgage market. Cutts also said HELOC performance remains strong into 2017, where subprime loans are lower in volume than first mortgages.

According to the report, there were about 14 million outstanding home equity loans at the end of 2016. That total continues an almost pure steady dropoff in outstanding home equity loans since 2008, when they totaled more than 24 million.

About 11 million of those outstanding HE loans were revolving HELOCs; the remainder were installment equity loans. The 4.4 percent of home equity installment loans outstanding was a 2.3 percent drop from the close of 2015.

The total number of outstanding HELOCs in December were down 3 percent from a year earlier. The total balances outstanding on HELOCs in that same time is $474.9 billion, a decrease of 3.8 percent; the severe delinquency rate of 1.18 percent in Q4 was down from 1.33 percent in December of 2015.

Early-stage delinquencies in all home equity loans finished Q4 around 0.05 percent, which is flat compared to Q4 of 2015. About 1.4 percent of home equities were in serious delinquency at the end of 2016, down less than a quarter of a percent from a year earlier.

 

 

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.
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