Dennis Corkery, vice president, Equifax Capital Markets comments on the latest game changing innovation for the loan market: “Investors and lenders historically have had limited, up-to-date borrower information on mortgage loans — until Equifax’s post-bid and surveillance solutions. For many investors and lenders, this has created a blindspot when assessing the financial profile of mortgage borrowers and making loan purchase and sale decisions. By providing a 360 degree view of borrower financial health, Credit Risk Insight Whole Loan equips financial institutions with the insight they need to value residential whole loans based on an asset’s complete risk profile.”
Equifax designed this latest innovation as an online platform consisting of three products — Credit Risk Insight Pre-Bid(TM), Credit Risk Insight Post-Bid(TM) and Credit Risk Insight Surveillance(TM). Pre-Bid statistically matches anonymous borrower credit information to loan-level data and then appends various leading indicators of loan performance such as updated credit and bankruptcy scores, performance on past mortgages, debt balances, delinquencies and monthly payments. With Pre-Bid investors receive 12 months of anonymous credit history for each loan while investors and lenders using Post-Bid and Surveillance benefit from timely access to current data on each borrower. Investors and lenders have the option of applying this analysis at the loan level as early as pre-bid — giving them a more complete picture of the collateral health underlying non-securitized mortgage and home equity loans.
The launch of this Equifax solution is well aligned with the changing requirements of today’s lending community and investment markets. According to the Federal Reserve Board, U.S. commercial banks reached a record high of $1.48 trillion in residential whole loan assets at the beginning of Q2 2011. Given this trend, investors, lenders, mortgage insurers and servicers need a holistic solution like Equifax’s latest offering that enables them to:
- Better understand borrower credit health trends on a loan and pool basis
- Improve valuation and pricing of loans and pools of loans
- Differentiate between healthy and unhealthy loans and pools
- Analyze and benchmark borrower behavior trends by market segment
Equipped with an extensive array of unique data variables, Pre-Bid, Post-Bid and Surveillance provide seamless access to a number of score options. With all of these solutions, investors, lenders and mortgage insurers can select Equifax’s Personal Income Model(TM) (PIM), the FICO® credit score and the FICO Mortgage Industry Option known as the BEACON® Mortgage Score. The solution also leverages VantageScore®, a consumer credit scoring model developed by Equifax and the other major credit reporting companies. This suite of solutions is also designed with another powerful tool — Equifax’s Enhanced DTI(TM). Used in conjunction with a credit risk score, Enhanced DTI provides an expanded view of a borrower’s total debt and income to help financial institutions better predict payment behavior, refine risk-based pricing and improve loss mitigation strategies. Source: Equifax