HEL Delinquencies Hit 2-Year Low

Delinquency rates on home equity loans and home equity lines of credit fell to two- and three-year lows, respectively, in the first quarter of 1998, according to data released by the American Bankers Association.The delinquency rate on HELs (closed-end seconds) in the first quarter was 1.30% -- an 8-basis-point drop compared with the first quarter of 1997 and a 19-bp decline from the fourth quarter. The last time the HEL delinquency rate was this low was the third quarter of 1996, when it stood at 1.29%. The delinquency rate on HELOCs fell to 0.76% in the first quarter, a 44-bp drop over the past 12 months and a 20-bp drop when compared with fourth quarter numbers. The delinquency rate for HELOCs has not been this low since the second quarter of 1995, when it was 0.75%. The ABA did not distinguish between 'A' credit and subprime borrowers in its quarterly survey. However, a spokesperson said a small portion of the loans were originated to 'B' credit borrowers.