March 05, 2015 00:01 ET
Estimated Balance of Resetting HELOCs at $158 Billion, $88 Billion on Underwater Homes; Average Payment Increase of $146 a Month; California, Florida, Illinois With Most Resets
IRVINE, CA–(Marketwired – March 05, 2015) – RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its first-ever U.S. HELOC Resetting Report, which found that 56 percent of the 3.3 million Home Equity Lines of Credit potentially resetting with higher, fully amortizing monthly payments from 2015 to 2018 are on properties that are seriously underwater.
For the report, RealtyTrac analyzed open HELOCs originated between 2005 and 2008 with the assumption that these loans will reset with fully amortizing monthly payments after a 10-year period of interest-only payments. RealtyTrac used average HELOC utilization rates from the New York Federal Reserve and the prime interest rate of 3.25 percent to calculate the outstanding balance of the loans and to calculate the interest-only and fully amortizing monthly payments. See full methodology below.
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