Information services provider Experian announced the availability of CreditHorizons for Whole Loan Portfolios, which is a new way for clients to analyze and value their whole loan portfolios.
This new method utilizes consumer credit data, credit risk scores and predictive attributes to offer a more complete view of the credit health of the underlying borrowers, thus enhancing the client’s ability to forecast future loan performance.
Experian’s consumer credit data team have tested and identified the key credit attributes that can positively affect the client’s bottom line. Credit attributes provide a beneficial new dimension to the probability of default models that are now being used by the market. The direct result is a client's ability to make better decisions regarding asset value. This creates a significant competitive advantage for them.
For instance, a hedge fund recently used CreditHorizons in a portfolio analysis of a performing option ARM pool. CreditHorizons identified additional fraud losses, recent bankruptcy filings and two times the number of investor-owned properties than those that were reported by the pool’s seller. This information made a big difference in the pool’s value, and resulted in the client deciding not to bid.
CreditHorizons for Whole Loan Portfolios is delivered via Experian Capital Markets’ dedicated team of industry professionals.
“Experian Capital Markets’ CreditHorizons for Whole Loan Portfolios adds a new level of transparency by linking individual borrower behavior to expected loan performance,” said Ethan Klemperer, general manager and senior vice president at Experian Capital Markets. “This additional insight will improve the value analysis of performing and non-performing loans, and facilitate dynamic credit risk monitoring within whole loan pools.”
Klemperer added that CreditHorizons for Whole Loan Portfolios delivers updated consumer credit scores as well as key credit attributes to better forecast borrower default.
The attributes includingcredit card utilization rates are predictive indicators of early mortgage delinquency,” Klemperer said. “Borrowers who exhibit high credit card utilization are 27 times more likely to default on their mortgages within the subsequent three months.”
