Articles Tagged with ''Credit score''

The kids are not moving out, so homebuilders are moving in

As Bob Dylan first sang nearly 48 years ago: "The times, they are a-changin." And it certainly holds true in the homebuilding profession, where builders are revamping product offerings to serve families with multiple generations living under one roof. A few years ago, 20-somethings, armed with a decent FICO score and a steady job, could easily qualify for a mortgage. Now we find ourselves in a world where homeownership is marred by tighter underwriting guidelines and a lack of secure employment among potential homebuyers.
Read More

Ability-to-repay proposal undermines mortgage origination advances

Considering the state of flux of the economy, jobs in particular, it's hard to find succinct wisdom in the Federal Reserve's proposal to modify mortgage origination under Regulation Z. In fact, it's hard to believe it will have a meaningful impact on mortgage originations, though the Fed obviously sees it the other way around.
Read More

Introducing the Fifth C of Underwriting

Most of us know all too well the four Cs of underwriting: capacity, character, collateral, and credit. The four Cs have in many ways defined risk-based pricing on mortgages for decades, and are a convenient way to segment the myriad failures that led our economy to the precipice, as well. I can’t help but wonder, however, if it’s finally become time in this country to add a fifth C to the mix. Call it “calculation”—as in a borrower’s ability to understand basic math. Picture the following scenario:
Read More

Cure Rates Plunge Among Prime RMBS, Fitch Says

A slower cure rate among delinquent loans erased improvements in the number of loans rolling into delinquency status among US residential mortgage-backed securities (RMBS), according to Fitch Ratings. Cure rates decrease as fewer delinquent loans return to current payment status each months. The prime cure rate slipped from an average 45% during '00-'06 to 6.6% today. Alt-A cure rates dropped to 4.3% from an average 30.2% and subprime cure rates fell to 5.% from an average 19.4%.
Read More

Delinquencies Rise at a Slower Rate, Says TransUnion

The rate of mortgage borrowers 60 or more days late increased for the 10th straight quarter and is at an all-time high of 5.81% in Q209, according to market research by credit bureau TransUnion. The rate of delinquencies is up 11.3% from Q109's rate, according to TransUnion's study of a random selection of 27m credit files from its national consumer database. The increase is lower, however, than the 16% increase between Q408 and Q109. Mortgage delinquencies are up 65% year over year, TransUnion added.
Read More

Fannie Loses $14.8bn, Needs $10.7bn

Government-sponsored enterprise (GSE) Fannie Mae [stock FNM][/stock] said it needs a $10.7bn injection of cash from the Treasury Department to stay afloat after losing $14.8bn in Q209. The Q209 loss, about $2.67 per share, is less than the $23.2bn ($4.09 per share) that Fannie had in Q109. Fannie had $18.8bn in credit-related expenses, which was down from $20.9bn in Q109. The provision for credit losses was $18.2bn, but only $4.8bn of that was for net charge-offs. The remaining $13.4bn went toward building loss reserves, as Fannie expects continued losses.
Read More

Radian Profits Soar, Q209 Underwriting Strengthens

Philadelphia-based mortgage insurer Radian Group [stock RDN][/stock] earned $231.9m ($2.82 per share) in Q209, up from a loss of $392.5m in Q208. Mortgage insurance claims of $167.7m were lower than projections. However, Radian said it expects to pay between $275 and $300m in claims during Q309. Radian said government programs to stem foreclosures are helping Radian’s bottom line.
Read More