Secondary Market/Investors

Equifax Launches Credit Risk Evaluation Tool

By: PAUL JACKSON
May 5, 2008

Equifax Inc. (EFX: 35.605 +0.89%) said Monday that it has launched a tool that targets forward-looking valuations of mortgage-backed and related securities. Called Mortgage Market Risk Insight, or MRI, Equifax touted it as the first such tool on the market that can help investors assess credit risk tied to underlying collateral.

“The real power of Mortgage MRI is its ability to segment the universe of borrowers that are still current on their mortgage loans to help improve mortgage credit risk and cash-flow analytics,” said Dann Adams, president, US Consumer Information Solutions, Equifax. “Mortgage MRI is the only tool available that provides aggregated credit data derived from the entirety of borrower credit profiles to gauge credit risk on mortgage debt.”

Equifax, along with other major consumer credit bureaus, has moved heavily into the mortgage market as investor interest in credit risk has become a front-and-center issue during the ongoing credit crisis.

“With increased sensitivity to credit risk in the mortgage secondary and capital markets, the industry must find new ways to leverage information,” said Tom Madison, senior vice president, Equifax Mortgage Solutions.

Mortgage MRI segments zip-level data by vintage, loan type and first mortgage payment status. Once the data is segmented, Mortgage MRI leverages a set of indicators and models to analyze credit risk and the likelihood of a certain borrower profile filing for bankruptcy over the next 24 months. The results are then aggregated for subscribers.

Equifax in December rolled out a software data suite targeting loss mitigation efforts; the data provided by major credit bureaus is often a vital step in the process of working with troubled borrowers.

For more information, http://www.equifax.com.

Disclosure: The author held no position in EFX when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.


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