Delinquencies on home equity loans fell 23 basis points to reach 2.68% of all accounts in the fourth quarter of 2015, while delinquencies for home equity lines of credit fell 13 basis points to 1.18% of all accounts, according to the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin.
That means delinquency rates on these two product types are approaching their 15-year averages for the first time since the recession, the ABA reports.
Property improvement loan delinquencies increased five basis points in the fourth quarter compared with the third quarter, rising to 0.92% of all accounts.
Installment loan delinquencies remained near historical lows, matching the third quarter’s composite number.
“It’s been a long, rocky road, but home equity delinquencies have finally worked their way back to historical norms,” says James Chessen, chief economist for the ABA, in a release “The strong and consistent rise in home prices over the last three years has restored equity, which makes keeping loans current even more of a top priority for homeowners. With rising home equity and shrinking delinquencies becoming the status quo, banks are more willing to extend new home equity loans and lines to qualified borrowers.”
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