By Mike Colpitts
Home mortgage balances have dropped $1.2 trillion since the start of the U.S. financial crisis in 2008, according to Equifax. The deleveraging 
of mortgages has come as a result of the record breaking U.S. foreclosure crisis and consumers paying down household debt.
Home mortgage losses taken by banks and investors, including institutions and private firms for April dropped 29% from two years ago. However, the write-offs were still a massive $71.5 billion for the month, and are at the lowest level since 2008 when the financial crisis was first realized on Wall Street.
It was the fourth straight year of mortgage losses taken by lenders. Home equity balances are also gradually declining, with revolving balances near $560-billion, down $115 billion from two years ago. Some of the drop in home equity loans has been attributed to refinancing.
“Consumers are now starting to see greater accessibility to credit opportunities and they are taking advantage of those opportunities, though in moderation,” said Equifax chief economist Amy Crew Cutts. “The American household’s balance sheet is looking much better now, with debt burdens down significantly due to both write-offs and consumer led deleveraging.”
Foreclosures that are in process for lines of home equity are also showing signs of improvement, dropping 37% from one year ago as an increasing share of lenders settle for less than what is owed on lines of credit or second mortgages in short sales, according to the credit reporting agency.
Fixed rate mortgages are the lowest since Freddie Mac has been keeping track of loans, which should drive an increase in home sales during the summer, typically the busiest time of the year.
Initial government estimates for first quarter economic growth was 2.2%, slower than the final quarter of 2011 but an improvement over the last year. Consumer consumption grew at an annualized rate of 15.3% for the first quarter, Freddie Mac said, reflecting sustained growth in consumer durables, including cars and other large purchases like appliances.
The increase in buying activity on larger household goods demonstrates that consumers are paying off debt burdens enough to feel comfortable to make major purchases. According to government figures, residential fixed investment in new home construction and remodeling is also growing for the fourth straight quarter.