Articles Tagged with ''Credit score''

Commentary: Not Your Garden Variety Foreclosures

RealtyTrac announced today that foreclosures are up markedly. While the number of foreclosure filings, which includes default notices, auction sales notices, and bank repossessions, rose 8% in January compared to the previous month, the new figures represent a 57% increase compared to a year ago. While the number of subprime mortgages, especially those that were written in 2006 when rational lending guidelines took a hiatus, is a major factor contributing to this increase, another trend that’s emerging is painting a disturbing picture.
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Occupancy Fraud Seen as Growing Problem

Via the Wall Street Journal Wednesday comes a look at just how prevalent occupancy fraud really is -- something that lenders and servicers across the nation are just now starting to come to terms with. From the story:
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Fair Isaac Touts Rental, Bill Payment Information in FICO Program for Mortgage Lenders

Fair Issac Corporation -- purveyor of the ubiquitous FICO score used to score most mortgage credit applications -- said this morning that it has partnered with Payment Reporting Builds Credit (PRBC) to provide rental payment and bill payment histories as part of its FICO Expansion Score suite. Fair Issac characterized the new score as a tool "U.S.
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Indymac Announces It Will Resume Funding Prime Jumbos

Per Indymac's corporate blog, the Pasadena-based thrift said today it will again begin originating prime, single-family residential, full documentation jumbo loans: These prime jumbo products will be available through all Indymac's distribution channels for borrowers providing full documentation only. The product offerings include 5/1 adjustable rate mortgages (ARMs), 7/1 ARMs, and 15- and 30-year fixed rate products. The following provides the minimum standards a borrower must meet to qualify for these products:
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Study: Subprime Borrowers Pay Consumer Debt Before Mortgage

An Experian-sponsored study of subprime consumers, released today, found that borrowers with a credit score of 620 or lower are turning an age-old mortgage industry axiom on its head: subprime consumers say they are now more likely to pay down credit card debt and let their mortgage become delinquent than the other way around. Traditional thinking in the industry has usually held the opposite position: that consumers always paid their mortgage, even if they couldn't afford anything else.
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Introducing the Newest Form of Fraud - And it's Legal (For Now)

A reader forwarded me a story yesterday than just had my jaw dropping -- borrowers can apparently rent someone else's credit to raise their own credit score, essentially using a loophole in today's credit rating system to their advantage. Imagine paying $1,800 to move your credit score from 550 to 715, in less than one month. Read that again. And then shudder, especially if you work in the mortgage industry, because it's absolutely true. And, for now, it's absolutely legal.
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Fitch: Do FICO Scores Matter?

While rising mortgage defaults are to be expected during a housing market downturn, the sharp rise in U.S. subprime mortgage defaults -- combined with a collapse in available subprime credit -- is an event that is gaining strong attention from regulators and rating agencies alike. In a new report, Fitch Ratings tackles the collateral attributes that contribute to early default activity in subprime mortgages underlying RMBS issuances. Generally, Fitch noted that there is typically a lag between the slowdown in home price growth and a rise in mortgage defaults. However, the rating agency's analysis found that the severe response of the 2006 subprime vintage to the cooling housing market is attributable to high borrower leverage, as well as the widespread use of stated income loan programs.
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Study: 70 Percent of EPDs Linked to Fraud

More than 70 percent of early payment defaults can be linked to a significant misrepresentation on the original loan application, according to a new study released today by BasePoint Analytics. The study concluded that loans containing egregious misrepresentations were up to five times more likely to default in the first six months than loans that did not; more importantly, the study concluded that predictive models could be deployed early in the loan process to help lenders predict which loans were likely to default within the first six months, enabling the loans to be rejected pre-funding.
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