Q1 Mortgage Write-Offs at Nine-Year Low

The total balance of write-offs for first mortgages, home equity lines of credit and home equity loans during the first quarter was $9.5 billion, according to new data from Equifax. This represents a 22.7 percent year-over-year drop and a nine-year low for first-quarter write-offs.

Severe delinquency rates also experienced strong year-over-year declines during the first quarter, impacting first mortgages (from 2.35 percent to 1.65 percent), home equity installment loans (from 1.98 percent to 1.59 percent) and home equity revolving lines of credit (from 1.47 percent to 1.33 percent). The shrinking severe delinquency rate on first mortgages was particularly dramatic, reaching their lowest level since September 2007.

“Homeowners are in the best financial shape they’ve been in since well before the start of the Great Recession,” said Amy Crews Cutts, senior vice president and chief economist at Equifax. “Total mortgage debt is down over $1 trillion, owner’s equity is up to $12.5 trillion, nearly double the amount held in 2011, and low inventories of homes for sale are driving prices up at a modest pace. Moreover, the average interest rate on outstanding mortgage loans keeps falling as more and more homeowners refinance into rates below four percent, giving borrowers more spending capacity each month.”