Home equity loans and lines of credit are on the rise, as delinquencies continue to plummet across the nation, according to recent research from """"Black Knight Financial Services"""":http://www.bkfs.com. The data and analytics division of the company--formerly the """"LPS"""":http://www.lpsvcs.com/Pages/default.aspx data and analytics division--released its November Mortgage Monitor Report, which found that total delinquencies are at extremely low levels in every product category.[IMAGE]
""""Looking at the most current mortgage origination data, several points become clear,"""" said Herb Blecher, SVP of Black Knight Financial Services' data and analytics division. """"First is that heightened credit standards have resulted in this year being the best-performing vintage on record. Even adjusting for some of these changes, such as credit scores and loan-to-values, we are seeing total delinquencies for 2013 loans at extremely low levels across every product category.""""[COLUMN_BREAK]
The total amount of non-current loans sits at 6.45 percent, with a month-over-month change in delinquency rate hovering at 2.63 percent. For some states, the change is a welcome relief. The """"sand state"""" of Florida is no longer the leader of non-current loans; New Jersey has taken that distinction with Mississippi, New York, and Louisiana following in short order. Non-current rates in both New Jersey and New York are now on par with Florida and Nevada, and twice that of either California or Arizona. Colorado, Montana, Arkansas, North Dakota, and South Dakota are among the state with the lowest percentage of non-current loans.
Refinance volume also continues to decline as the November data showed that the population of """"refinancible"""" mortgages has decreased by about 4 million loans since the end of 2012. Currently, just 5.9 million loans meet broad-based refinance criteria, including loan-to-value ratios of 80 percent or less; credit scores of 720 or higher; current payment status; and interest rates higher than the prevailing interest rate. However, loosening of credit standards, even slightly, could have a significant effect. As an example, lowering the credit score criteria to 700 increases the refinancible population by almost 17 percent, or an additional 1 million loans.
""""Although tighter credit requirements, coupled with interest rate increases, have helped drive originations down to their lowest level since 2010, thanks to increasing home prices, we have seen a significant increase in home equity lending,"""" Belcher said.