Homebuyers are routinely offered “location, location, location” as the most important thing to consider when purchasing a home. Recent analysis by WAIN Street shows that mortgage investors could also benefit by focusing on property locations.
In February 2016, about six months after rating a securitization, Moody’s found “faster buildup of delinquencies and charge-offs than expected” in the pool of Prosper loans backing the ABS. Experts had noticed deterioration months earlier…pundits discerned a signal…insights followed—macro trend…credit cycle…borrower stress. But then in July, Moody’s decided there was “absence of substantial deterioration”. So, what […]
Much has been written about the death of the FICO credit score. See Wall Street Journal’s “Silicon Valley: We Don’t Trust FICO Scores” and American Banker’s “Will Fintechs Kill the FICO Score?” for recent (Summer 2016) articles. The narrative invariably revolves around how the score is backward looking…considers limited individual past behavior…and can occasionally misfire […]
Who’s a better credit risk for a $15K loan? A person making $80K a year or a person making $35K? Most of us would prefer the $80K person – makes enough to cover the interest payments … probably facing unanticipated expenses … wedding? … medical? But wait! What if that 35K person worked in a […]
By including information concerning the economic vitality of a borrower’s locality as a decisioning criteria, investors can improve the performance of their Lending Club loan portfolio. Overlaying local economic vitality data provides additional insights about borrower creditworthiness that is not captured by traditional credit scoring models. Our framework blends this additional information into an expected […]
Spread across states and active in all industry sectors, over 5 million businesses in the US employ fewer than 20. Their total sales of over $4 trillion and total employment of over 20 million is roughly comparable to the entire Canadian economy!
We always knew that people feel good about the world when they see a booming Main Street. We now have the data to prove it.
A recent analysis by WAIN Street demonstrates the predictive power of very small business credit performance for consumer spending.
A recent analysis by WAIN Street confirms what practitioners already know—how very small businesses fare foretells what happens in bank loan portfolios. Loan portfolio quality is the primary factor affecting overall asset quality which is one of the most critical determinants of bank condition.
Is a loan to a baker in Hampden County, MA as risky as a loan to a baker in Orange County, CA? Is a loan to a plumber in AZ as risky as a loan to a dentist in AZ? Intuitively, the answer is no. The point of Localizing Risk is that the intuition can be […]