Equifax: First Mortgage Defaults Hit Nine-Year Low
Equifax Inc., Atlanta, said first mortgage defaults in June fell to under 18,000, the lowest level since January 2007.
The company’s National Consumer Credit Trends Report said 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.
However, the report said while the overall U.S. first mortgage rate returned to historic lows, some states and territories did not follow the trend. Puerto Rico came in at three times the national write-off rate at 12.9 basis points, while Nevada came in at two times the national rate coming in at 6.6 basis points. Nevada was followed by Florida and New Jersey (6.2), Delaware (5.1), Mississippi (5.0), Maryland (4.9), New Mexico and South Carolina (4.8) and Rhode Island (4.5).
“The backlog of foreclosures from the financial crisis finally appears to be waning and write-offs are returning to historically-normal levels,” said Amy Crews Cutts, senior vice president and chief economist with Equifax. “Rising home values have helped significantly, as have improving labor markets. Given the low inventory of homes for sale and the overall improving credit profile of the U.S. consumer, we expect home sales to maintain the upward trend we’ve seen in the first half of the year and for mortgage default performance to continue its downward path.”
For Home Equity Lines of Credit and home equity installment loans, the report showed a minor increase in home equity installment loan write-offs from 7.6 basis points to 8.0 basis points and a decrease in home equity revolving lines of credit from 4.0 basis points to 3.4 basis points.
Equifax said for first mortgages, the severe delinquency rate (as a share of balances 90-days past due or in foreclosure) fell to 1.40 percent, down from 2.07 percent a year ago. First mortgages outstanding rose to 49.8 million, an increase of 0.7 percent from a yeaer ago. Total balances outstanding on first mortgages rose to $8.33 trillion, a year-over-year increase of 2.8 percent.
For home equity installment loans, the severe delinquency rate (as a share of balances 90-days past due or in foreclosure) fell to 1.46 percent, down from 1.80 percent a year ago. Total outstanding balances on home equity loans in June fell to $131.4 billion, a year-over-year decrease of 2.7 percent; total outstanding loans is 4.5 million.
For HELOCs, the severe delinquency rate (as a share of balances 90-days past due or in foreclosure) fell to 1.28 percent, down from 1.45 percent a year ago. Total outstanding HELOCs fell to 10.9 million, a year-over-year decrease of 3.4 percent. Total balances outstanding on HELOCs fell to $486.5 billion, a decrease of 3.5 percent.
