Tag Archives: Equifax

An uptick in housing demand is being met with mortgage originations for borrowers with less than perfect credit scores, but not without caution. Read on to see what impact Equifax is seeing subprime borrowers have on the mortgage market

"The trend in the market indicates consumers appear more confident in the economy and are moving forward with their lives and borrowing money again." -Assad Lazarus, SVP, Product and Customer Experience at Equifax Personal Information Solutions.

Lenders across the U.S. appear to be offering borrowers a second chance at obtaining a mortgage by originating more subprime mortgages for borrowers with credit scores under 620.

Mortgage originations have seen tremendous growth this year, according to Equifax's National Consumer Credit Trends Report. The report found that mortgage origination balances reached $466 billion in the first quarter, a 74.4 percent increase from the same time a year ago. First mortgages increased 79.9 percent compared to the first quarter of 2014 to $430 billion, leading this growth spurt. Meanwhile, originations of home equity lines of credit (HELOCs) increased 30 percent to $30.9 billion and new home equity installment loans climbed 13.6 percent to $5 billion.

After extensive research, data scientists from FICO found that info such as property records, telecommunications, and utility information can be used as reliable sources to score 15 million consumers who do not have enough credit data to generate FICO score. By using this alternative data from LexisNexis and Equifax, FICO will give card issuers a FICO score that complies with relevant regulations that they can use to extend credit responsibly to millions of additional people.

In 2014, more than $120 billion worth of HELOCs were originated, which is a 21.5 percent year-over-year increase. In addition, more than 1.2 million new HELOCs were opened in 2014, a 15.8 percent increase from the year before. These represent six year highs for HELOC originations.

Credit reporting agency Equifax released on Monday its latest National Consumer Credit Trends Report, revealing that the total balance of new credit for revolving home equity loans in the year's first seven months was $65.9 billion. The figure, up 21.4 percent year-over-year, marks a six-year high.

According to Equifax’s latest National Consumer Credit Trends Report, the total balance of first mortgages in February came up to $7.97 trillion, a 2.8 percent year-over-year increase and the highest balance since December 2011. “The decline in mortgage balances from accelerated amortization and foreclosure write-offs has finally been overcome by increases in mortgage debt due to home purchase lending,” said chief economist Amy Crews Cutts.

Outstanding home finance balances increased for the third straight month in January, signaling what might be the start of a long-term resurgence in borrowing, Equifax reported in its most recent National Consumer Credit Trends release. “American consumers have shed more than $1.5 trillion in mortgage debt since the start of the financial crisis and only now seem interested in investing in housing again,” said Amy Crews Cutts, chief economist.

In a recently released white paper, Equifax delves into undisclosed debt and offers recommendations for how to deal with a potentially difficult hazard.