Home Equity Lending News

TD’s Home Equity Holdings Up, Loan Performance Improves

TD Bank Group’s American home-equity assets have expanded by $600 million over the past year. Meantime, transaction equity and loan performance have improved.

The average uninsured combined loan-to-value ratio on newly acquired and originated home-equity loans and lines of credit was 62 percent, according to an analysis of the Toronto-based bank-holding company’s U.S. fiscal second-quarter 2023 results, which encompassed the three months ended April 30.

CLTVs were slightly improved when compared to 63 percent six months prior.

TD concluded April with $7.4 billion in HELs and HELOCs, no different than at the end of January. A year earlier, home-equity holdings stood at $6.8 billion.

Eighty-five percent of first-lien home-equity assets had an LTV of no more than 60 percent, while the share was 57 percent for second-liens.

TD said that on home-equity credit scores, 91 percent of first-lien borrowers had a FICO score of more than 700, similar to the 89 percent share for second-lien borrowers.

The rate of gross impaired HELs and HELOCs was 2.33 percent. That’s an improvement from 3.92 as of April 30, 2022.

“TD’s retail businesses in both Canada and the United States continued to show strong revenue and earnings growth this quarter, with robust customer originations and loan volumes,” TD Bank Group President and CEO Bharat Masrani said in the earnings report.

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