Equifax Reports New Credit for Revolving Home Equity Loans Increases More than 21% Year-Over-Year

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Oct 20, 2014, 12:29 ET

ATLANTA, Oct. 20, 2014 /PRNewswire/ -- Equifax announced its latest National Consumer Credit Trends Report, the total balance of new credit for revolving home equity loans year-to-date in July 2014 is $65.9 billion, a six-year high and a year-over-year increase of 21.4%. Similarly, the total number of new loans in that same time is more than 670,000, a six-year high and a year-over-year increase of 16.1%.

"The sharp rise in percentage terms in home equity lines of credit (HELOCs) is a result of both increasing availability of home equity that homeowners have accumulated in their homes as well as a preference shift by lenders away from home equity installment loans in favor of HELOCs," said Amy Crews Cutts, Equifax Chief Economist. "Home equity installment loans require a higher compliance burden on lenders and for consumers home equity lines of credit offer tremendous advantages in terms of when they draw the loan money and how the payments are structured. More and more lenders are offering amortizing HELOCs in addition to their HELOCs with an interest-only term."

Cutts went on to add, "While the recent increases in HELOC lending seem large, the total volume of HELOC lending is just over a third of what it was prior to the financial crisis. HELOCs will continue to gain favor in coming year as homeowners who want to renovate their homes or fund other needs will not want to do a cash-out refinancing if the interest rate on their first mortgage is very low."

Other highlights from the most recent Equifax data include:

Home Finance:

The total balance of home finance write-offs year-to-date through September is $75.7 billion, 36.7% lower than same time a year ago;
Delinquent balances, those 30 or more days past due, represent 4.55% of outstanding balances, a decrease of 21.4% from the same time last year;

First Mortgage:

Write-off balances on first mortgages year-to-date through September represent 0.85% of outstanding balances, a decrease of 31.8% from same time a year ago;
Delinquent first mortgages, those 30 or more days past due, represent 4.69% of outstanding balances, a decrease of 21.8% from same time a year ago;
Similarly, the total balance of first mortgages (90-days past due or in foreclosure) is $207 billion, a decrease of 30% year-over-year and the lowest level in more than five years.

Home Equity Revolving

The total balance of home equity revolving loans in September 2014 is $477.7 billion, a decrease of 3.9% from same time a year ago and a five-year low. Similarly, the total number of loans outstanding is 10.2 million, the lowest total in 10 years;
Delinquent balances, those 30 or more days past due, represent 2.4% of outstanding balances, a decrease of 10.2% from the same time last year;
The total balance of severely delinquent home equity revolving loans (90-days past due or in foreclosure) in September 2014 is $7.5 billion, a decrease of 13.7% from same time a year ago.

Home Equity Installment

The total balance of severely delinquent home equity installment loans (90-days past due or in foreclosure) in September 2014 is $2.77 billion, a decrease of 30.8% from same time a year ago;
The total balance of home equity installment loans is $125.4 billion, a decrease of 8.0% from same time a year ago, while the total number of loans outstanding is just over 3.7 million, a year-over-year decrease of 7.1%;
The total balance of home equity installment loans in foreclosure is $386.7 million, a five-year low and a decrease of nearly 14% from same time a year ago;

About Equifax, Inc.

Equifax is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company's significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enable it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.

Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.

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SOURCE Equifax Inc.