Home >> News >> Data >> FICO and PRMIA Report Quarterly Findings
Print This Post Print This Post

FICO and PRMIA Report Quarterly Findings

A new study from ""FICO"":www.myfico.com/ revealed that banking professionals are raising their expectations for loan repayments and credit availability. The survey, which was conducted by the ""Professional Risk Managers' International Association (PRMIA)"":www.prmia.org/ on behalf of FICO, showed a reversal in sentiments among U.S. lenders following the first quarter of the year. '

[IMAGE]

Significant findings from the report included a 12 percent decline in the number of respondents anticipating an increase in mortgage delinquencies for the remainder of the year. The total fell from 47 percent to 35 percent in FICO's most recent quarterly numbers.

FICO's chief analytics officer and head of FICO labs, Dr. Andrew Jennings, said of the results, ""As unemployment falls, even

[COLUMN_BREAK]

modestly, and four years of deleveraging begin to pay dividends, bankers are allowing themselves to feel some optimism. Of course, we're not out of the woods.├âÔÇÜ├é┬á Foreclosures continue to put pressure on home prices, and jobs are coming back slowly.├âÔÇÜ├é┬á But we seem to be headed in the right direction.├âÔÇÜ├é┬á If we can avoid major bumps in the road, such as a spillover effect from the Eurozone crisis, we should continue to see delinquencies drop.""

The majority of participants in FICO's survey felt that credit availability for most loan types was likely to meet or exceed demand over the next six months. However, mortgage loans were the exception, with 56 percent of those responding predicting lack of credit supply within the sector during the same time frame.

Continuing his commentary, Jennings added, ""These results are consistent with the general sentiment that delinquencies will be less of a problem over the next six months. As lending risk ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô both perceived and real ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô declines, the natural reaction by lenders is to loosen the purse strings and extend more credit.├âÔÇÜ├é┬á This should be welcome news to consumers and businesses alike, because increased access to credit is a key driver of economic growth.""

The collaborative survey from FICO and PRMIA evaluated 263 risk managers at financial institutions around the country. The report, which was conducted during February, received special analytical assistance from the ""Columbia Business School's Center for Decision Sciences"":decisionsciences.columbia.edu/.

About Author: Abby Gregory

x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.