Residential lending moved significantly higher last year, though not so much for home-equity lending — especially on new credit lines.
During all 12 months of last year, mortgage firm’s originated $1.82 trillion in first mortgages. That worked out to 7.71 million loans.
Business climbed from 2014, with prior-year first-mortgage production coming in at roughly 5.86 million loans closed for
$1.27 trillion.
The statistics were included in the March 2016 Equifax National Consumer Credit Trends Report. The report reflects statistics culled from a database of more than 220 million consumers.
Equifax Chief Economist Amy Crews Cutts noted in the report that growth in originations came from both refinances and purchase financing.
“While low interest rates are helping, continued gains in employment and consumer confidence are key,” Crews Cutts said. “What we are not seeing is any meaningful loosening of underwriting, at least with respect to credit scores.”
Subprime borrowers, those whose Equifax Risk Scores were 620 or less, accounted for 366,900 of first mortgages originated for $59.7 billion during 2015.
Subprime production improved from 2014, when approximately 293,051 first mortgages were closed for around $42.3 billion.
The median credit score on overall first-mortgage production was 750 in 2015, while 90 percent of borrowers had a score that exceeded 646. There has been little change in credit scores over the past three years.
Home-equity loan originations totaled 791,900 units for $26.5 billion last year. The number of HELs closed was the most in more than seven years.
HEL activity ascended from roughly
625,020 loans for around $21.9 billion in 2014. The increase from 2014 to 2015 was the greatest since 2008.
Subprime HEL volume was more than 83,000 loans for $1.73 billion, expanding from about
63,262 loans closed for $1.62 billion during 2014.
Equifax reported that nearly 1.39 million home-equity lines of credit
were opened in 2015 for $146.1 billion in total new lines.
HELOC production strengthened from the previous year, when volume approximated
1.24 million units for $122.1 billion.
Lenders granted $0.7452 billion in new HELOC lines to 20,100 subprime borrowers last year, an increase over 2014, when approximately
17,448 HELOCs were opened for in the neighborhood of $0.6868 billion.
Subprime HELOC production in 2015 was higher than it’s been during any year since 2008 — when 35,660 lines were opened for $1.78 billion.
