Equifax: Total number of first mortgage defaults lowest since January 2007

by Michael Mata10 Aug 2016
Equifax Inc. has just released its June 2016 National Consumer Credit Trends Report. This monthly report analyzes data from over 220 million consumers in the United States. According to the report, the first mortgage write-off rate is 3.3 basis points (100ths of a percentage point) of outstanding balances. Meanwhile, the total number of first mortgage defaults in June 2016 was 17,909, the lowest it has been since January 2007. 

While the overall US first mortgage write-off rate has returned to historic lows, it remains high in some parts of the country. Puerto Rico, which is dealing with a major debt crisis, has a write-off rate that’s three times higher than the national average (12.9 basis points). Nevada has the second highest write off rate at 6.6 basis points, which is twice as high as the national average.  

Other states that have high write-off rates include Florida (6.2), New Jersey (6.2), Delaware (5.1), and Mississippi (5.0).

"The backlog of foreclosures from the financial crisis finally appears to be waning and write-offs are returning to historically-normal levels," said Amy Crews Cutts, senior vice president and chief economist at Equifax. "Rising home values have helped significantly, as have improving labor markets. Given the low inventory of homes for sale and the overall improving credit profile of the US consumer, we expect home sales to maintain the upward trend we've seen in the first half of the year and for mortgage default performance to continue its downward path."

As for first mortgages, the severe delinquency rate was 1.40% in June 2016, down from 2.07% in June 2015.
Meanwhile, as of June 2016, the total number of first mortgages outstanding was 49.8 million—a 0.7% increase from June 2015. Lastly, the total balances outstanding on first mortgages was $8.33 trillion as of June 2016, a year-over-year increase of 2.8%.


Should CFPB have more supervision over credit agencies?