As mortgage lending slows, borrowers with lower credit scores are accounting for a larger share of new originations.
Third-quarter 2013 home loan production totaled 1.95 million units.
A year earlier, residential lending volume was 2.29 million units.
The findings were reported by TransUnion based on its proprietary Industry Insights Report, a quarterly summary of data, trends and perspectives on the U.S. consumer lending industry.
“The report is based on anonymized credit data from virtually every credit-active consumer in the United States,” an announcement from the Chicago-based service provider said.
TransUnion Head of Financial Services Steve Chaouki explained that a significant decline in new account originations was primarily the result of retreating refinances from rising rates.
He also noted that continued tight lending standards remain a factor in some market sectors.
But despite tight lending standards, the share of nonprime borrowers — those whose VantageScores are less than 700 — increased to 6.61 percent in the third quarter 2013 from 5.55 percent in the same period in 2012.
Still, it’s nowhere near the 16.26 percent share in the third-quarter 2007.
“Mortgage loans originated in the last few years have significantly higher credit quality than those originated prior to the recession, with delinquency rates that resemble those seen seven to 10 years ago,” Chaouki said.
TransUnion collected data on 52.84 million mortgage accounts as of Dec. 31, 2013.
At the end of 2012, there were 53.85 million loans outstanding.
In the year of the global financial crisis, 2008, outstandings were far higher than today at 62.85 million.
