|
Post by bot on Sept 22, 2015 19:55:13 GMT -5
Subprime mortgage lending rises sharply, but remains well below crisis levels
The number of first mortgages extended to subprime borrowers was up 30.5% in the first five months of 2015, according to data from consumer-credit agency Equifax . At the same time, the number of home equity loans to subprime borrowers climbed 29.5%, while home equity lines of credit to subprime borrowers was up 20.4%. Subprime borrowers are generally defined as those with a credit score below 620. Still, the segment remains just a fraction of overall mortgage originations, said Equifax, and is far below the pace of subprime lending that was being extended prior to the Great Recession. "The data make it very clear that almost nobody is getting home equity lines of credit if they don't have a credit score above 620," said Amy Crews Cutts, Equifax chief economist. "But we are seeing a rise in first mortgage and home equity installment loan origination subprime shares. It appears that American lenders still believe in second chances, and without subprime loans, there would be no second chances in the housing market." Still, Equifax said lenders have clearly taken steps to reduce risk. In 2008, more than 10% of first mortgage originations went to subprime borrowers, compared with about 4.6% in 2015.
|
|