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Mortgage Lates Down, Super Prime Lending Leaps

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Home loan performance continued to improve at an accelerating pace. Super-prime originations have risen by half over the past year.

Delinquency of at least 60 days on residential loans finished the third quarter of this year at 2.40 percent.

That was a pretty good improvement compared to three months earlier, when delinquency came in at 2.72 percent.

An even bigger improvement was made compared to the third-quarter 2014, when the 60-day rate was 3.36 percent.

The details about home loan performance were included in the
Q3 2015 Industry Insights Report from TransUnion. The findings reflect anonymized credit data from most credit-active consumers.

“The decline in serious mortgage delinquencies is continuing and even ramping up, with steadily increasing absolute drops over the last year,” TransUnion Vice President and Mortgage Business Leader Joe Mellman said in the report. “We believe this is due to a combination of factors, including strong performance by recent vintage mortgage loans, improving home prices, and the continued funneling of delinquent accounts through the foreclosure process.”

Florida’s mortgage delinquency rate tumbled to 3.75 percent from 6.42 percent in the third-quarter 2014 — the biggest drop of any state.

For just millennials, the U.S. 60-day rate was 1.62 percent as of Sept. 30, 2015, while borrowers who were at least 60 years old had a rate of 1.77 percent.

TransUnion reported that 2.01 million home loans were originated during second-quarter 2015, surging from 1.48 million in the previous quarter and a 40 percent improvement over the same three-month period last year.

Mortgage production remains better than the 1.80 million quarterly average since falling to a post-crisis low in the second-quarter 2011.

On just super-prime loans, lending was up by 50 percent from a year earlier. Prime-plus originations
increased 40 percent, while a 30 percent increase from the second-quarter 2014 was reported for prime, near-prime and subprime mortgages.

“This is now the third straight quarter where we’ve not only seen year-over-year mortgage origination growth, but also significant increases in the higher risk populations of near prime and subprime — hinting at a loosening of credit and/or a change in the mix of borrowers seeking mortgages,” Mellman stated.

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