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HEL, Mobile Home Loan Delinquency Deteriorates

Mortgage News

Late payments on home-equity and mobile-home loans that are held by financial institutions turned higher during the first-three months of this year.

Closed-end consumer loans that are owned by U.S. banking institutions had a 30-day delinquency rate of 1.38 percent as of the first quarter of 2016.

The past-due rate, which reflects performance on eight
installment loan categories, retreated 3 basis points compared to the final quarter of last year.

Thirty-day delinquency, which is based on the American Bankers Association’s Composite
Ratio
, improved by 15 BPS versus the first-quarter 2015.

“More people have jobs, wages are higher, home values have increased, and consumers didn’t overextend themselves during the holiday season,” ABA Chief Economist James Chessen said in the report. “Even with a mild slowdown in the economy in the first quarter, consumers have shown a remarkable ability to ensure their debt levels are manageable.”

ABA’s report indicated that delinquency on home-equity loans was 2.74 percent, deteriorating from 2.68 percent in the fourth-quarter 2015.

Still, HEL delinquency was down from the same period last year, when the 30-day rate was
3.12 percent.

Home-equity lines of credit had a 1.15 percent rate of delinquency as of March 31, 2016, better than 1.18 percent three months earlier and 1.42 percent one year earlier.

On property improvement loans, the late-payment rate declined 3 BPS to 0.89 percent
and was off from 0.90 percent as of March 31, 2015.

A 25-basis-point increase in mobile-home loan delinquency left the 30-day rate at 3.41 percent as of the most-recent period.
But the rate for the category was down from 3.52 percent in the year-earlier period.

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