econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 03 January 2017

Loans Originated In The Third Quarter Were Higher In Credit Quality Than One Year Ago

from CoreLogic

-- this post authored by Archana Pradhan

Loans originated in Q3 2016 are among the highest-quality home loans originated since the year 2001, according to the latest CoreLogic Housing Credit Index (HCI) Report.[1] Figure 1 shows the overall Housing Credit Index from Q1 2001 through the end of Q3 2016.

Higher index values indicate a higher level of credit risk for new originations and lower index values indicate less credit risk present. Compared with other loans made since mid-2009, the starting point of the current economic expansion, Q3 2016 loans are among the loans originated with the lowest credit risk based on six important credit-risk attributes.

The decline in the HCI over the last four quarters has been primarily caused by lower credit-risk characteristics of new refinance loans (Figure 2). In Q3 2016, the HCI for purchase loans was about the same compared to the previous three quarters whereas the HCI for refinance loans had declined each quarter. With the mortgage rate most likely to increase next year, we expect a rise in the share of purchase loans and less influence of refinance loans on overall HCI compared to the current period. An increase in the number of purchase loans may introduce more mortgage fraud risk in 2017 because, contrary to refinancing, purchase transactions involve a new owner and more parties and documents, which offers more opportunities for fraud.

Figure 3 plots the six indicators used to calculate the HCI for prime conforming conventional purchase-money loans. The blue hexagon represents an index of credit-risk attributes in the benchmark period (average of 2001 and 2002 set equal to 100 for each attribute) and the red polygon represents characteristics of loans made in Q3 2016 relative to the benchmark. The share of borrowers with credit score less than 640 and the low- and no-doc share were down significantly compared to the 2001-2002 benchmark period. The share of new loans with LTV of 95 percent or higher was slightly above the benchmark period. The share of loans with DTI at-or-above 43 percent was about 80 percent of the share during 2001 and 2002. In contrast, the non-owner occupied borrower share was about 30 percent higher than the benchmark period and the condo & co-op share was slightly above the benchmark level.

Note for Figure 3: The share of loans made during 2001 and 2002 with the credit-risk attribute shown on the axis is set equal to 100.

Source

http://www.corelogic.com/blog/authors/archana-pradhan/2016/12/housing-credit-index-third-quarter-2016.aspx#.WFrlw_krKUk


Footnotes

1 CoreLogic has begun issuing a quarterly Housing Credit Index report this quarter.

© 2016 CoreLogic, Inc. All rights reserved.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Minsky’s Theory of Asset Prices: Why Minsky Was NOT a Neo-Monetarist
Finance and Growth: The Direction of Causality
News Blog
Early Headlines: Asia Stocks Mixed, Oil Up, Dollar Down, China GDP On Target, GOP Govs Defend Medicaid Expans., Trump Wants To Cut Fed. Spending By $ 1 Trn, Trump's Troubling Foreign Deals And More
The Fake News That Sealed The Fate Of Antony And Cleopatra
The Jobs With The Biggest Cash Bonuses
Astronomers Spot Strange, Bow-like Structure In Venus' Atmosphere
Raising A Child Is An Extremely Expensive Undertaking
The World's Staggering Wealth Divide
What We Read Today 19 January 2017
OK Go - The One Moment - Official Video
January 2017 Philly Fed Manufacturing Survey Significantly Improves and Remains In Expansion.
December 2016 Residential Building Sector Mixed
14 January 2017 Initial Unemployment Claims Rolling Average Improvement Continues
Stock Market Bull Faces Important Test
Infographic Of The Day: Movies That Struck Oil
Investing Blog
How To Invest In Oil For Long-term Investors
Investing.com Technical Summary 19 January 2017
Opinion Blog
What Is The Natural Interest Rate - And What If We Go Above It?
A New Deal With Capitalism Requires A Revolution In Politics And Markets
Precious Metals Blog
Four Catalysts Drive Gold And Silver For 2017
Live Markets
19Jan2017 Market Close: Wall Street Closes Down Fractionally On Lackluster Investor Participation Ahead Of Tomorrow's Presidential Inauguration, George Soros Said That Global Markets Will Falter
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved