The Real Deal New York

US mortgages down last year, but so are delinquencies

January 14, 2014 02:04PM

The U.S. loan market last year saw fewer delinquencies and more jumbo lending, despite tighter lending requirements which have constrained lending overall, experts say.

Higher credit standards led to the record low level of total delinquencies in the U.S., said Herb Blecher, senior vice president of the data and analytics division at Black Knight Financial Services. “This year [is] the best-performing vintage on record,” he said, of last year’s loan market.

However, overall volume was down.

“First mortgage originations are almost half the levels as one year ago,” Blecher told Housing Wire. However, home equity lending has increased by 70 percent, and originations of second lien home equity loans have more than doubled, he noted.

The U.S. mortgage market also saw a 75 percent increase in the volume of non-government-agency jumbo prime lending in November, compared to the same month in 2012, according to Black Knight data cited by Housing Wire.

“Notably, nearly all of these jumbo loans have been originated with no mortgage insurance, which may indicate an increased appetite for risk, as well as an opportunity to expand credit criteria, for originations within the private market,” Blecher explained.

Homebuyers have been finding jumbo mortgages cheaper than traditional ones — something that has never happened before — and have been taking advantage of the better rates by borrowing more, as previously reported. [Housing Wire]Mark Maurer