Posts Tagged ‘Home Equity Loan’

Are Home Equity Loans Staged for a Comeback?

Posted on November 15, 2017 by Laura Lam

There has been a hint of optimism for home equity lending among bankers this earnings season, but attitudes remain mixed a decade after the housing market crash began.  While home equity lines of credit provided a lift to some bank consumer portfolios, a number of other banks said their home equity businesses had fallen and added little about their future. Industry observers say bankers should take the long view. Home equity lines of credit especially are poised to grow now that home values have been rising for a number of years during the economic recovery.  “If you think about the…

Home Equity Loans on the Rise

Posted on April 11, 2017 by Laura Lam

Mortgage lenders, along with borrowers, are starting to welcome home equity lines of credit back into the market after the loan product began to disappear in the wake of the financial crisis.  Given their growing prominence in the market, a new report from the American Bankers Association’s Consumer Credit Delinquency Bulletin provides a current pulse on the health of the product by looking at delinquencies.  The report looked at both closed-end loans and open-end loans, since home equity loans fall into both categories. Bankrate explains that there are two types of home equity loans: term, or closed-end loans, and lines of credit, open-end loans.  A home equity…

Home Equity Demand Picks Up

Posted on February 06, 2017 by Laura Lam

Thanks to a confluence of factors, many banks and credit unions are predicting a surge in originations of both home equity loans and home equity lines of credit in 2017.  Driving the demand, bankers said, is that homeowners finally seem ready to take advantage of the appreciation in home values and pull the trigger on home-improvement projects they have been putting off, said Logan Pichel, the head of consumer lending at Regions Financial. Another contributing factor is that banks are carrying relatively low balances of home equity loans, so they have plenty of room to originate new loans. Though it…

Consumer Delinquencies Fall Below Historic Levels

Posted on April 11, 2016 by Laura Lam

Rising home values continue to provide consumers with a strong incentive to keep up with their home equity loan payments.  According to the American Bankers Association’s quarterly report on consumer delinquency trends, late payments on home equity loans and home equity lines of credit have dipped below 15-year averages for the first time since the Great Recession. In the fourth quarter of 2015, the 30-day delinquency rate on home equity loans fell 23 basis points, to 2.68%, from three months earlier, and home equity line delinquencies fell 13 basis points, to 1.18%, the survey found. However, property improvement loan delinquencies…

Sharp Decline For Consumer Loan Delinquencies

Posted on November 05, 2015 by Saldutti

Consumer loan delinquencies fell sharply in the second quarter ended June 30, thanks to large drops in home loan-related delinquencies, according to the American Bankers Association.  Delinquencies fell in 7 of the 11 loan categories.  The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, dropped 17 basis points to 1.36% of all accounts – well under the 15-year average of 2.27%. Bank card delinquencies rose by three basis points to 2.52% of all accounts, also well below their 15-year average of 3.74%. Home equity lines of credit delinquencies fell from 1.42% to 1.34%. Non-card revolving loan delinquencies fell…

Late Payments on Home Equity Loans Hit Post-Crisis Low

Posted on October 20, 2015 by Saldutti

U.S. homeowners continue to take advantage of rising house prices to dig themselves out of the hole created by the Great Recession.  In the second quarter, the 30-day delinquency rate on home equity lines of credit dropped to 1.34%, its lowest mark since the third quarter of 2008, according to a new American Bankers Association survey.  Late payments were down from 1.42% in the first quarter.  Similarly, the rate of late payments on closed-end home equity loans dropped to 1.36%, which is another post-recession low. The comparable delinquency rate during the prior 3 months was 1.53%. The S&P/Case Shiller index,…

Sub-prime Mortgages Continue to Climb

Posted on October 05, 2015 by Saldutti

Mortgage originations to those with subprime credit scores continued to climb steadily over the first 5 months of 2015, according to data from the latest Equifax National Consumer Credit Trends Report.  Each category – first mortgages, home equity installment (HE) loans and home equity lines of credit (HELOC) – showed significant increases in subprime originations over the same period a year ago. The number of first mortgage originations to borrowers with low credit scores was up 30.5%, HE loans was up 29.5%, and HELOCs rose 20.4%. Despite the considerable increases in subprime originations, their overall numbers remain only a small…

U.S. Debt Downgrade – How Will It Affect Me?

Posted on August 10, 2011 by Saldutti

Lawmakers weren’t able to prevent the country from losing its coveted AAA debt rating.  Although the downgrade late Friday by Standard & Poor’s was historic, it wasn’t entirely unexpected. The three main credit agencies, which also include Moody’s Investors Service and Fitch Ratings, had warned during the fight over the debt ceiling that if Congress did not cut spending far enough, the country faced a downgrade.  And just like a lower consumer credit score implies that a borrower is a less reliable, a lower credit rating for government bonds implies there is more risk involved in lending money to the…