Equifax: First Mortgage Origination Balances Increased 42.9% in 2015

Equifax, Atlanta, reported first mortgage originations totaled $1.82 trillion in 2016, a year over year increases of nearly 43 percent, while first mortgage originations totaled 7.71 million, a 31.6 percent increase.

Equifax said underwriting practices remained consistent in 2015, with median credit score remaining relatively unchanged for past three years.

The company’s March National Consumer Credit Trends Report also reported first mortgage lending to borrowers with subprime credit (consumers with an Equifax Risk Score of 620 or below) also showed strong growth. Balances rose to $59.7 billion, an increase of 41.3 percent; while number of loans totaled 366,900, an increase of 25.2 percent.

“We saw a nice jump in mortgage lending in 2015 that was driven by both rising home-purchase activity and solid refinancing volumes,” said Amy Crews Cutts, Senior Vice President and Chief Economist with Equifax. “While low interest rates are helping, continued gains in employment and consumer confidence are key.”

Equifax said the median credit score on new first mortgages in the fourth quarter was 750, with 90 percent of first mortgage borrowers having a score in excess of 646.

Other report data:

Home Equity Installment Loans
–New home equity installment loans originated in 2015 totaled 791,900, an increase of 26.7 percent from the previous year. Total balance of new loans in that same time was $26.5 billion, an increase of 20.8 percent;
–New loans originated 2015 was the highest level in more than seven years, while in that same time, 2014-2015 showed the third-highest percentage increase, for a calendar year since 2008.
–More than 83,000 new loans originated for borrowers with subprime credit in 2015, a year-over-year increase of 31.2 percent. Total balance of new loans was $1.73 billion, an increase of 6.5 percent.
–10.5 percent of all loans were issued to subprime-credit borrowers, a slight increase from the previous year’s share (10.1 percent).

Home Equity Lines of Credit
–Total credit limits of new loans originated in 2015 rose to $146.1 billion, a 19.7 percent increase from the previous year. New loans originated totaled 1.39 million, an increase of 11.7 percent over 2014;
–20,100 loans originated for borrowers with subprime credit in 2015, an increase of 15.2 percent and the highest total since 2008 (35,660 loans);
–Total credit limits on new subprime HELOCs in 2015 was $745.2 million, an 8.5 percent increase and the highest total since 2008 ($1.78 billion).