HELOC Originations Slip Despite Overall Rise

During the three months ended June 30, U.S. mortgage originations from all home lenders amounted to $466 billion.

The findings were reported in the Quarterly Report on Household Debt and Credit August 2015 from the Federal Reserve Bank of New York.

Statistics revealed by the Fed reflect data reported by credit bureaus.

Second-quarter activity was
an improvement of $97 billion over the first quarter of this year.

It was “the fourth consecutive increase after a 14-year low one year ago.”

But the origination of home-equity lines of credit was down one percent.

The Fed noted, “Underwriting standards remained tight for mortgages in the second quarter, even as mortgage originations increased overall.”

The report indicated that $232 billion in closed loans for the latest three-month period went to borrowers with credit scores in excess of 780, while less than $38 billion went to borrowers with scores less than 660.

As of June 30, mortgage debt outstanding — the biggest component of household debt in the United States — stood at $8.12 trillion.

The collective principal balance of home loans outstanding
declined from the first quarter, falling $0.055 trillion from three months earlier.

The Fed reported that $0.499 trillion in home-equity lines of credit were outstanding as of mid-2015.

HELOCs outstanding were down by $0.011 trillion from March 31.

Mortgage delinquency of at least 90 days finished June at 2.5 percent. The serious delinquency rate tumbled from 3.0 percent at the end of March.

“Although delinquency rates improved, delinquency transition rates show a mixed picture,” the report stated. “There was a modest improvement in transition rates for mortgages in early delinquency, with 17.3 percent of 30-60 day delinquent mortgages transitioning to serious delinquency. Transition rates for current accounts worsened, though, with 1.2 percent of current balances transitioning to delinquency.”