The percent of home equity loans characterized as seriously delinquent continued declining in March, according to data released by Moody's Investors Service. Although, the rating agency pointed out the percent of overall delinquencies were watered down by a roughly 20% increase of new home equity issuance over the same month last year, essentially freshening up the pool with new loans. The percentage of loans more than 60 days delinquent stood at 5.19%, marking a 21% decrease from the same time last year, when the amount of loans delinquent stacked up at 6.59%, according to Moody's. The rating agency tracks the aggregate performance of home equity loans backing the securities it rates.
The downturn in the overall portion of loans delinquent was a result of the larger sample size than in previous years, Moody's reported. "While Moody's expects that this trend will eventually reverse itself, there are no signs of this occurring yet as the addition of $39.1 billion worth of new pools to Moody's Home Equity Index Composite kept both the delinquency and charge-off rates low," Moody's stated in a release last week.