Origination Report: Consumer Unsecured, June 2024

Consumer Unsecured Originations Stabilizing YoY

The Consumer Unsecured sector has experienced fluctuating origination trends this year. It began with strong months in January and February, followed by weak originations in March, a robust rebound in April, another dip in May, and a strong recovery in June.

Rather than focus on the volatile monthly figures, the spotlight is on the YoY change in originations, and while volumes are still substantially lower than their early 2022 peaks, it is nevertheless a sign of stability in the market. More importantly, it suggests the market has rebounded substantially from the horrendous origination trends Q3/Q4 2023, which saw volumes collapse by nearly a third in the latter part of 2023.

Quick Insights

• June 2024 Origination Surge: A notable 7% month-over-month increase in origination volumes, with a 4.4% rise in loan counts, indicating strong market performance.

• Year-over-Year Stabilization: Non-negative year-over-year comparisons in April and June 2024, marking the first stability in nearly two years and signaling recovery from late 2023 downturns.

• FICO Scores: Average score increased to 732, driven by higher 740+ FICO originations.

• DTI and PTI: Decrease in DTI ratio, offset by a 10 bps increase in PTI ratio.

• Income Trends: Slight decline in average borrower income, but still 32% higher than pre-COVID levels.

• Regional Shifts: Decline in New England/NY originations, with increases in the Midwest and Oil States.

• Loan Pricing: Significant decrease in GWACs, particularly for top and middle-grade loans, reversing May’s increases and indicating competitive pricing.