Equifax: Q1 Volume Increases

Equifax Inc. has released its May 2016 National Consumer Credit Trends Report, which shows among other findings, that total mortgage volume increased in Q1 2016, compared to opening quarters in previous years.

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Total new accounts and year-over-year increases for the first quarter of 2016 include:

>>Home equity installment loans: 182,400, an increase of 23.5 percent and an eight-year high for an opening quarter;

>>First mortgages: 1.86 million, an increase of 10.3 percent; and

>>Home equity lines of credit (HELOC): 314,400, an increase of 10.2 percent.

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Similarly, the latest data shows that lending to borrowers with subprime credit scores (consumers with an Equifax Risk Score of 620 or below) – as a share of total lending – has remained consistent for the third consecutive year. New first mortgage accounts to subprime borrowers during Q1 of 2015-2016 have increased on a consistent basis alongside that of prime lending, with approximately 95 percent accounting for prime loans and 5 percent accounting for subprime loans.

“The first quarter of 2016 was a strong one for mortgage lending and underwriting practices appear to have maintained their rigor over the last three years.” said Amy Crews Cutts, chief economist for Equifax. “We anticipate that the second quarter of 2016 will maintain this trend. And later this year, the much-anticipated addition of trended credit data to the mortgage underwriting process will help to strenghten the marketplace further by helping to statistically separate lower risk borrowers from those presenting higher risk.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.