Magazine article American Banker

OCC Lowers Estimate of Home Equity Loan Resets

Magazine article American Banker

OCC Lowers Estimate of Home Equity Loan Resets

Article excerpt

Byline: Brian Collins

WASHINGTON -- The looming threat posed by billions of dollars' worth of home equity loans due to reset their interest rates in the next few years has eased somewhat, according to new regulatory data.

The Office of the Comptroller of the Currency is now predicting that $167 billion in home equity lines of credit held by the largest national banks will reset between 2014 and 2017, a 21% drop from its previous estimate.

"The numbers have come down for a variety of reasons," said Darrin Benhart, a deputy comptroller at the OCC, citing refinances, modifications, pay-offs and charge-offs.

"This represents the success banks have had in starting to address this risk issue in a proactive manner," Benhart said.

Banks originated millions of HELOCs during the housing boom, helped by rising house prices, easy credit and the fact that borrowers only pay interest during the first 10 years. …

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