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Tag Archives: Risk

As Draw Periods Close, HELOCs Present Elevated Threat

Now that so many of the once-popular home equity lines of credit (HELOCs) are coming due, many borrowers could be in for what TransUnion calls "payment shock." A new study by the credit reporting agency shows that nearly half of all HELOC balances at the end of 2013—totaling about $474 billion—were originated between 2005 and 2007. Many of these HELOCs had 10-year draw periods, which means that the bill will soon come for those borrowers.

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Mortgage Loan Risk Recedes

According to the American Enterprise Institute's (AEI) latest National Mortgage Risk Index, the share of home purchase loans at risk of going sour in the event of an economic downturn fell nearly half a percentage point last month to 11.44 percent. According to the group, the risk value of loans securitized in Fannie and Freddie's portfolios fell slightly to 5.8 percent, while the risk index for FHA slipped to 23.6.

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$1.5T at Risk in Storm Surge

In the midst of hurricane season, CoreLogic released its storm surge analysis for the year, counting more than 6.5 million homes at risk of hurricane damage and a total of $1.5 trillion in total reconstruction costs for these homes. Importantly, CoreLogic noted a large portion of homes susceptible to flood damage are not located within Federal Emergency Management Agency (FEMA) flood zones and therefore are not required to carry flood insurance.

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56% of Lenders Worried New Bubble is Inflating

As home prices continue to rise—albeit slower than last year—many commentators insist that fears of a new bubble in the making are overblown. However, a new survey released Tuesday suggests lenders aren't buying it. In a survey of U.S. and Canadian mortgage lenders, FICO found 56 percent of respondents directly involved in the industry are concerned that "an unsustainable real estate bubble is inflating."

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Mortgage Risk Index Declines Slightly

AEI's National Mortgage Risk Index (NMRI), released monthly through the institute's International Center on Housing Risk, registered 11.87 percent for May, down from April's revised reading. The institute considers any index value below 6 percent as "indicative of conditions conducive to a stable market." The index acts as a stress test, measuring the percentage of loans at risk of default in the event of another economic crisis.

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OCC: Banks Taking on More Risks

As the U.S. economy continues to improve, the challenges facing the banking industry gradually shift from recovery to risk management in an effort to avoid the pitfalls that contributed to the financial crisis, the Office of the Comptroller of Currency (OCC) said in its Semiannual Risk Perspective for Spring 2014. OCC warned that banks' boards of directors and senior managers should monitor heightened exceptions to traditional underwriting standards.

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Report Finds Flaws in Analysis of Re-Performing RMBS Deal

Standard & Poor’s (S&P) may have made some missteps in evaluating the risk of a residential mortgage-backed security (RMBS) transaction that has now been postponed, Fitch Ratings says in a recent report. In a release issued Friday, Fitch says S&P relied on incomplete home value data for loans contained in the recently announced RMBS transaction to be issued by Bayview Asset Management.

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Credit Risk Down to Post-Crash Low

TransUnion released its Credit Risk Index (CRI) Wednesday, concluding that credit risk dropped at the end of 2013 to the lowest level since 2005. "With credit risk at such low levels, there is a possibility that consumers in higher risk segments may see more credit offers, as some lenders decide they have the room in their profit models to take on greater risk," said Ezra Becker, VP of research and consulting for TransUnion.

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Showalter, CAO of Digital Risk on New Origination Risk – Aug 08,2013

[ca_audio url_mp3='http://blogtalk.vo.llnwd.net/o23/show/5/248/show_5248007.mp3' css_class='codeart-google-mp3-player' autoplay='false' download='false' html5='false']Thomas Showalter, Chief Analytics Officer of Digital Risk, joins Mortgage Markets Today to discuss interest rates and identifying risk attributes to predict loan ...

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