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Equifax Measures Mortgage Default Likelihood
HOW LOANRATEUPDATE WORKS
READ OUR DISCLOSURE
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateUpdate and the offers you have received, you've found the right product and the best rate.
READY TO TAKE IT TO THE NEXT LEVEL?
LOANRATEUPDATE IS NOT A LENDER OR A BROKER BUT WE HAVE LOTS OF FRIENDS WHO ARE
Pick the service you desire below
Equifax Measures Mortgage Default Likelihood
HOW LOANRATEUPDATE WORKS
READ OUR DISCLOSURE
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateUpdate and the offers you have received, you've found the right product and the best rate.
LOANRATEUPDATE IS NOT A LENDER OR A BROKER BUT WE HAVE LOTS OF FRIENDS WHO ARE
Pick the service you desire below
Equifax Measures Mortgage Default Likelihood

February 11, 2011 (Chris Moore)
mortgage-credit-scores-image
Equifax has introduced a new method of calculating a borrower’s behavior and identify the likelihood of a mortgage default. It’s a new metric called “default distance” and it measures the time lapse, in months, between when a borrower defaults on revolving debt, such as credit card or auto payments, and when a borrower first starts the foreclosure process.

Putting their metric to the test in a recent study, Equifax found that revolving debt defaults consistently occurred before first mortgage loan defaults with the time span between them decreasing over time based on which states were hit the hardest by the economic recession and the housing market collapse.

Equifax linked anonymous borrower credit information to CoreLogic loan-level, mortgage-backed securities data to measure default distance at every point in the life of all non-agency securitized loans. Analysis was performed utilizing Federal Housing Finance Agency home price data on mortgage loans for borrowers with only one mortgage outstanding and revolving debt included credit card and home equity lines of credit.

A positive number indicates a borrower defaulted on a revolving debt first while a negative number indicates a borrower defaulted of their mortgage first.

States that have consistently had the highest foreclosure rates and hit hardest in the economic downturn like California, Florida, and Michigan had the shortest “default distances,” all less then five months, while states that have faired better economically like Texas and South Dakota had the longest “default distances,” about 15 months.

The study partially debunks the myth that high credit scores are an indicator of future credit risk as the study found that someone with respectable credit may default on their mortgage soon after they default on the revolving credit.

“In general, borrowers in these score bands consistently pay all their credit obligations on time,” Equifax said. “However, when these borrowers default on one account, many of them end up defaulting on multiple other accounts at the same time.”

Overall, the average default distance has decreased since 2005 entailing that less time elapses between revolving debt default and mortgage default.

In the end it simply proves the theory that even people with high credit scores can just as easily go bust when facing difficult economic conditions like loss of income or loss of employment.

Tags: equifax, corelogic, fhfa, mortgage loans, mortgage defaults, revolving debt, foreclosure process, default distance, credit risk, high credit scores

What's the four square system? How much is your trade-in really worth and why those payments really do seem a little higher than you thought.
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Sure that low interest dealer financing sounds really attractive but there's a price to be paid for that. We spill the beans as to why getting your own financing may save you money.
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Buying a home is a big decision. If you are not prepared, the decisions you make, the questions you don’t ask, and the details you miss could cost you thousands – in price, fees, financing, property issues, and home repairs.
Home loans can be confusing. There's a lot of options and we provide the information that makles it simple. Don't sign on that dotted line until you know. It could cost you.
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February 11, 2011 (Chris Moore)
mortgage-credit-scores-image
Equifax has introduced a new method of calculating a borrower’s behavior and identify the likelihood of a mortgage default. It’s a new metric called “default distance” and it measures the time lapse, in months, between when a borrower defaults on revolving debt, such as credit card or auto payments, and when a borrower first starts the foreclosure process.

Putting their metric to the test in a recent study, Equifax found that revolving debt defaults consistently occurred before first mortgage loan defaults with the time span between them decreasing over time based on which states were hit the hardest by the economic recession and the housing market collapse.

Equifax linked anonymous borrower credit information to CoreLogic loan-level, mortgage-backed securities data to measure default distance at every point in the life of all non-agency securitized loans. Analysis was performed utilizing Federal Housing Finance Agency home price data on mortgage loans for borrowers with only one mortgage outstanding and revolving debt included credit card and home equity lines of credit.

A positive number indicates a borrower defaulted on a revolving debt first while a negative number indicates a borrower defaulted of their mortgage first.

States that have consistently had the highest foreclosure rates and hit hardest in the economic downturn like California, Florida, and Michigan had the shortest “default distances,” all less then five months, while states that have faired better economically like Texas and South Dakota had the longest “default distances,” about 15 months.

The study partially debunks the myth that high credit scores are an indicator of future credit risk as the study found that someone with respectable credit may default on their mortgage soon after they default on the revolving credit.

“In general, borrowers in these score bands consistently pay all their credit obligations on time,” Equifax said. “However, when these borrowers default on one account, many of them end up defaulting on multiple other accounts at the same time.”

Overall, the average default distance has decreased since 2005 entailing that less time elapses between revolving debt default and mortgage default.

In the end it simply proves the theory that even people with high credit scores can just as easily go bust when facing difficult economic conditions like loss of income or loss of employment.

Tags: equifax, corelogic, fhfa, mortgage loans, mortgage defaults, revolving debt, foreclosure process, default distance, credit risk, high credit scores

What's the four square system? How much is your trade-in really worth and why those payments really do seem a little higher than you thought.
There's both advantages and disadvantages to leasing and buying depending on what you're planning to use your car for and how long you plan on keeping it.
Sure that low interest dealer financing sounds really attractive but there's a price to be paid for that. We spill the beans as to why getting your own financing may save you money.
Buying a car at a dealership hasn't changed much through the years but doing your research on the internet can you save you a lot of time and most importantly, a lot of money.
THINKING OF BUYING
A NEW CAR?


WE GIVE YOU THE INSIDE TIPS THAT
COULD SAVE YOU THOUSANDS.
Calculate how much you can afford
BUYING OR SELLING A HOME
IS A BIG DECISION
WE MAKE IT EASIER
Buying a home is a big decision. If you are not prepared, the decisions you make, the questions you don’t ask, and the details you miss could cost you thousands – in price, fees, financing, property issues, and home repairs.
Home loans can be confusing. There's a lot of options and we provide the information that makles it simple. Don't sign on that dotted line until you know. It could cost you.
FIND THE CREDIT CARD THAT'S RIGHT FOR YOU
THERE'S A CREDIT CARD FOR VIRTUALLY ANY SITUATION. FIND YOURS.
YOU'VE WORKED HARD TO BUILD YOUR DREAM

LEARN ABOUT THE LOAN OPTIONS AVAILABLE TO EXPAND YOUR BUSINESS

February 11, 2011 (Chris Moore)
mortgage-credit-scores-image
Equifax has introduced a new method of calculating a borrower’s behavior and identify the likelihood of a mortgage default. It’s a new metric called “default distance” and it measures the time lapse, in months, between when a borrower defaults on revolving debt, such as credit card or auto payments, and when a borrower first starts the foreclosure process.

Putting their metric to the test in a recent study, Equifax found that revolving debt defaults consistently occurred before first mortgage loan defaults with the time span between them decreasing over time based on which states were hit the hardest by the economic recession and the housing market collapse.

Equifax linked anonymous borrower credit information to CoreLogic loan-level, mortgage-backed securities data to measure default distance at every point in the life of all non-agency securitized loans. Analysis was performed utilizing Federal Housing Finance Agency home price data on mortgage loans for borrowers with only one mortgage outstanding and revolving debt included credit card and home equity lines of credit.

A positive number indicates a borrower defaulted on a revolving debt first while a negative number indicates a borrower defaulted of their mortgage first.

States that have consistently had the highest foreclosure rates and hit hardest in the economic downturn like California, Florida, and Michigan had the shortest “default distances,” all less then five months, while states that have faired better economically like Texas and South Dakota had the longest “default distances,” about 15 months.

The study partially debunks the myth that high credit scores are an indicator of future credit risk as the study found that someone with respectable credit may default on their mortgage soon after they default on the revolving credit.

“In general, borrowers in these score bands consistently pay all their credit obligations on time,” Equifax said. “However, when these borrowers default on one account, many of them end up defaulting on multiple other accounts at the same time.”

Overall, the average default distance has decreased since 2005 entailing that less time elapses between revolving debt default and mortgage default.

In the end it simply proves the theory that even people with high credit scores can just as easily go bust when facing difficult economic conditions like loss of income or loss of employment.

Tags: equifax, corelogic, fhfa, mortgage loans, mortgage defaults, revolving debt, foreclosure process, default distance, credit risk, high credit scores

THINKING OF BUYING
A NEW CAR?


WE GIVE YOU THE INSIDE TIPS THAT
COULD SAVE YOU THOUSANDS.
What's the four square system? How much is your trade-in really worth and why those payments really do seem a little higher than you thought.
There's both advantages and disadvantages to leasing and buying depending on what you're planning to use your car for and how long you plan on keeping it.
Sure that low interest dealer financing sounds really attractive but there's a price to be paid for that. We spill the beans as to why getting your own financing may save you money.
Buying a car at a dealership hasn't changed much through the years but doing your research on the internet can you save you a lot of time and most importantly, a lot of money.
Calculate how much you can afford
BUYING OR SELLING A HOME IS A BIG DECISION
WE MAKE IT EASIER
Buying a home is a big decision. If you are not prepared, the decisions you make, the questions you don’t ask, and the details you miss could cost you thousands – in price, fees, financing, property issues, and home repairs.
Home loans can be confusing. There's a lot of options and we provide the information that makes it simple. Don't sign on that dotted line until you know. It could cost you.
FIND THE CREDIT CARD THAT'S RIGHT FOR YOU
THERE'S A CREDIT CARD FOR VIRTUALLY ANY SITUATION. FIND YOURS.
YOU'VE WORKED HARD TO BUILD YOUR DREAM

LEARN ABOUT THE LOAN OPTIONS AVAILABLE TO EXPAND YOUR BUSINESS