MReport May 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 47 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION An Uneven Balance Aggregate household debt balances have increased higher than the last peak recorded in the third quarter of 2008, even as borrower credit scores decline. M ortgage balances, which form the largest compo- nent of household debt rose substantially, even as median credit scores of newly originating borrowers declined during the last quarter of 2017, according to data from the quar - terly report on Household Debt and Credit released by the New York Federal Reserve. Looking at overall household debt, the report indicated that aggregate household debt bal - ances increased for the fourteenth consecutive quarter to 13.15 trillion by the end of 2017, and were $473 billion higher than the previous peak recorded in the third quarter of 2008 when they touched $12.68 trillion. Household indebtedness increased 1.5 percent from the third quarter of 2017. When it came to mortgage balances, the report found that consumer credit reports stood at $8.88 trillion, an increase of $139 billion from the third quarter of 2017. Balances on HELOCs declined again, by $4 billion and stood at $444 billion at the end of the quarter. According to the report, new extensions for credit also declined slightly in the fourth quarter with mortgage originations, including refinanced mortgages, at $452 bil - lion, down from $479 billion in the previous quarter. The median credit score for mortgage borrowers also declined slightly from 760 to 755 during the last quarter of 2017. The last quarter also saw $452 billion in newly originated mortgage debt, while mortgage delinquencies continued to decline with 1.3 percent of mortgage balances being 90 or more days delinquent in December 2017. The report indicated that delinquency transition rates for current mortgage balances improved with 0.9 percent of current bal - ances transitioning to delinquency. Approximately, 70,000 individuals had a new foreclosure notation added to their credit reports between October 1 and December 31, 2017 according to the report. The Hidden Cost of Homeownership New findings examined homeowner costs that start after their loan is closed and may impact their ability to keep up with their mortgage. A ccording to a survey by personal finance website, Bankrate. com, The average U.S. homeowner spends an average of approximately $2,000 per year on maintenance services alone. The survey found that at least three in five homeowners, or 63 percent, used at least one recur - ring home maintenance provider, while 35 percent used two. The survey asked homeowners about the price they paid to maintain eight programs that included housekeeping, homeowners as - sociation dues, landscaping, home security systems, pool care, snow removal, septic services, and pri- vate trash/recycling collection. At an average monthly cost of $285, housekeeping was the most expensive maintenance cost paid by homeowners, followed by home association dues at $210. The survey found that home security systems ($130) cost only a little more than pool maintenance ($123) per month. "These figures illustrate the hid - den costs of homeownership, and it's important to note they don't include repairs such as a broken refrigerator, washing machine, or air conditioner," said Taylor Tepper, an analyst at Bankrate. com. "These are just ongoing, rou - tine tasks like keeping your house and yard clean." The survey also found that renters paid less for most of these recurring expenses. For renters, housekeeping costs were almost halved at $128 per month, while the average amount spent on home association dues came to $71 per month. Pool maintenance ($70) and landscaping ($61) were also much less than what home - owners paid during a month. However, renters paid more than homeowners for security systems ($142) and septic services ($113). Despite the lower costs, the survey found that only 37 percent renters hired someone to help with any of these tasks. While 20 percent of renters hired some - one for private trash/recycling, 13 percent employed help for landscaping, and 7 percent for housekeeping, spending approxi - mately $550 per year on these amenities. "These figures illustrate the hidden costs of homeownership, and it's important to note they don't include repairs such as a broken refrigerator, washing machine, or air conditioner." — Taylor Tepper, an analyst at

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