S&P, Experian Join Forces for New Mortgage Default Indices
[Update 1: Adds collateral detail] The credit rating agency Standard & Poor’s and the global information services company Experian will team up to launch a series of consumer credit default indices for mortgages and other loans, the firms said today. The first monthly S&P/Experian Consumer Credit Default Indices will be released May 18, 2010. Analysts will aim to measure the proportion of consumer loans that go into default for the first time. The four indices will measure defaults on first mortgages, second mortgages, auto loans and credit cards. A composite index will gauge default rates across all four loan types. The reports will drill down to metropolitan statistical areas (MSAs), state and regional levels. The firms will customize reports based on specific client requirements. The collateral detail of the loans used in the indices will be unique, according to S&P. "Other publicly available indices and metrics recount previously defaulted loans or measure delinquency rates only on securities loans. The S&P/Experian Indices do not use pools of securitized loans as an input, and will measure only first time defaults. Therefore, they will provide a clear and timely picture of trends in the U.S. credit markets," a spokesperson for S&P told HousingWire. The data is extracted from the Experian consumer credit database, populated with individual consumer loan and payment information submitted by lenders every month. The database covers roughly $11trn in outstanding loans sourced from 11,500 banks and mortgage companies. "Built from the monthly payment data generated by the lenders and aggregated by Experian, these Indices will provide a timely, detailed look into the actual payment behavior of US consumers," said David Blitzer, managing director and chairman of the index committee at S&P Indices. "In addition, since the Indices will allow us to get a pulse on the current default profile of consumers, they could also serve as a leading indicator on the direction of the US economy." Write to Jon Prior.