In news that will likely be met with some combination of grimaces and nervous glances, credit repository Equifax reports that the number of home equity lines originated to subprime borrowers has increased.
The total number of new home equity lines of credit to borrowers with lower risk scores increased 36% in the first quarter according to Equifax, and subprime borrowers made up 1.5% of total new HELOC accounts, up 20 basis points from this time the year before.
Total HELOC credit originated for borrowers of all types reached $9.5 billion in January, a seven-year high, and total accounts increased 20.1% from the same time the year before.
Some encouraging news though for those who fear a repeat of the past: overall write-offs on first mortgages and home equity products (excluding where the write-off is due to bankruptcy) declined 32.6%, to $12.34 billion, in the first quarter of 2015. Severe delinquencies of more than 90 days past due, bankruptcies and foreclosures on first mortgages dropped 92 basis points from the year before to 2.35%.
Foreclosures, bankruptcies and severe delinquencies on home equity installment loans decreased 61 basis points to 1.98%. Bankruptcies, foreclosures and severe delinquencies on home equity revolving lines of credit decreased 24 basis points to 1.47%.
