The current year to date write-off level is 22% less than a year ago.
Similarly, year-over-year decreases in home financing total delinquencies occurred for first mortgages, home equity installments and home equity revolving loans.
First mortgage delinquencies fell by 24.5% compared to last September from 7.9% to 6%. Home equity installment late payments decreased 21.9% on an annual basis from 6.2% to 4.8%, while home equity revolving loan delinquencies also declined during this time period by 17.6% from 3.2% to a little less than 2.7%.
“Transitions to deeper stages of delinquency are slowing,” says Amy Crews Cutts, chief economist for Equifax. “But we are also seeing acceleration in the transition rates from loans that have started the foreclosure process to being bank-owned in REO status.”
First mortgage REO rates decreased 27.9% in September to 1.71%, the Equifax National Consumer Credit Trends Report says, which is the lowest level in more than five years.
The balance of first mortgage severe delinquencies, 90-days past due or in foreclosure, is less than $300 billion, a decrease of 29% from a year ago. Of this severely delinquent total, loans opened over the three-year period between 2005 and 2007 represent 64% of these first mortgage balances.
“Improvements in labor markets and rising home values are pushing down mortgage delinquency rates and the outlook is very positive for continued improvement,” says Crews Cutts. “We’re now back to where we were in mid-2008 in terms of severely delinquent first mortgages and current trends suggest we will be at pre-recession levels of severe delinquencies by the end of 2014.”