Tools Produce Loan-Level Info For Investors

Posted by Orb Staff on April 13, 2009 No Comments
Categories : Residential Mortgage

nion, in cooperation with First American CoreLogic, has developed TransUnion Consumer Risk Indicators, a new solution that the companies say makes available previously missing information for secondary market risk analysis and modeling. The TransUnion Consumer Risk Indicators for residential mortgage-backed securities (RMBS) and whole loans bring current and historical loan-level consumer credit information to the mortgage industry for risk analysis. This includes information such as complete adjustable-rate mortgage exposure (beyond the loan in question) and the consumer's capacity to pay. ‘Billions of dollars in mortgage securities were traded without visibility into the risk of the underlying borrowers of the loans backing the securities, focusing instead on pool-level home price appreciation and initial loan-to-value,’ says Jeff Hellinga, president of TransUnion's U.S. Information Services division. Loan-level analysis is particularly relevant in light of the Treasury's recently created Public Private Investment Program, he adds. The TransUnion Consumer Risk Indicators for RMBS incorporate proprietary matching algorithms jointly developed between First American CoreLogic and TransUnion. These algorithms link individual loans within non-agency, mortgage-backed securities to the consumer credit information of the specific borrowers of those loans. The indicative solution allows investors to directly tie the newly available consumer credit information to the First American CoreLogic LoanPerformance Securities Database, which spans subprime, Alt-A, option-ARM and jumbo securities, and represents over $1.8 trillion in loan-level data – 96% of all non-agency securities – the companies add. TransUnion's Consumer Risk Indicators for Whole Loans provides a time series of data specifically proven to predict risk. ‘This time series is more predictive than the updated consumer reports currently used in the industry,’ says Hellinga. ‘We've also developed it to be easily incorporated into the existing bid process.’ SOURCES: TransUnion, First American Co

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