Steady Decline in Serious Delinquencies

first_img The Week Ahead: Nearing the Forbearance Exit 2 days ago Related Articles Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Subscribe Share Save The Best Markets For Residential Property Investors 2 days ago in Daily Dose, Featured, Market Studies, News, Servicing The Best Markets For Residential Property Investors 2 days ago Affordability Delinquencies Home Prices Homebuyers Joe Mellman TransUnion 2018-12-12 Donna Joseph TransUnion’s 2019 Consumer Credit Report forecasts an increase in originations and consumer balances for most credit products, while serious delinquency rates are likely to decline or remain steady. This will lead to lenders expanding their base of subprime and near-prime borrowers—a positive sign for both lenders and borrowers, according to the report. The report also predicts lenders will be less risk-averse with the steady pace of delinquency rates. This will also help borrowers to showcase their ability to better manage their finances, it said. Subprime borrowers will continue to have access to loans, it noted. Interestingly, the percentage of subprime borrowers originating loans remains far below what was recorded at the onset of the last recession, according to the forecast- wherein 9 percent of borrowers in this group originated mortgage loans in 2007. Pointing to home prices, the forecast indicated that though homes are becoming more expensive, the increase in home equity will benefit buyers. The downward trend in mortgage originations which has been steady over several quarters in the past will continue into 2019 as a result of rising interest rates, surging home prices and supply constraints, the report noted. A surge in average balances is expected in 2019, growing from an anticipated $208,831 at the end of Q4 of this year to $218,490 by the end of Q4 2019, a 4.6 percent increase. Delinquencies will also continue to drop from 1.62 percent by the end of this year to 1.45 percent by the end of 2019—a consistent downward trend since 2010 on a year-over-year basis, the report stated. “While overall originations will be down in 2019, increases in home prices are resulting in record levels of home equity, which provide homeowners more opportunities to tap into low APR home equity products. This will particularly benefit consumers deciding to pay off other higher interest rate products – as well as consumers finding it difficult to afford a new ‘move up’ house, who instead opt to invest in improving their existing home,” said Joe Mellman, SVP, Mortgage Line at TransUnion. TransUnion expects non-prime originations to decrease by 2.4 percent  “as the composition of new accounts changes.” The prime segment will see a resurgence in origination growth in the coming year, indicating lender’s desire for credit quality for their portfolios as delinquency continues to increase. Tagged with: Affordability Delinquencies Home Prices Homebuyers Joe Mellman TransUnion Demand Propels Home Prices Upward 2 days ago Home / Daily Dose / Steady Decline in Serious Delinquencies Data Provider Black Knight to Acquire Top of Mind 2 days agocenter_img Demand Propels Home Prices Upward 2 days ago Donna Joseph is a Dallas-based writer who covers technology, HR best practices, and a mix of lifestyle topics. She is a seasoned PR professional with an extensive background in content creation and corporate communications. Joseph holds a B.A. in Sociology and M.A. in Mass Communication, both from the University of Bangalore, India. She is currently working on two books, both dealing with women-centric issues prevalent in oppressive as well as progressive societies. She can be reached at [email protected] Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Sign up for DS News Daily Servicers Navigate the Post-Pandemic World 2 days ago About Author: Donna Joseph Steady Decline in Serious Delinquencies  Print This Post Governmental Measures Target Expanded Access to Affordable Housing 2 days ago December 12, 2018 4,830 Views Previous: Lawmakers and Industry React to Calabria Nom Next: HUD Secretary to Lead Opportunity and Revitalization Councillast_img

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