Moody's: Home Equity Late Pays Decline

The delinquency rate on securities backed by home equity loans declined by 25 basis points in the fourth quarter, according to Moody's Investors Service.The delinquency rate on Moody's Home Equity Index Composite was 8.79% at the end of last year, down from 9.04% in the third quarter. However, the chargeoff rate rose slightly, from 1.22% in the third quarter to 1.28%. Moody's analyst Julia Tung said strong issuance helped boost performance, since the average seasoning on home equity deals has fallen to 19 months. Delinquency rates tend to rise rapidly through the first 24 months of a deal's life, Moody's said. Despite the rise in chargeoffs, Moody's said both the delinquency and chargeoff rates remain strong by historical standards. The rating agency can be found on the Web at http://www.moodys.com.