In response to demand for increased transparency into the true health of mortgage loans, Equifax (NYSE:EFX) has launched a breakthrough data solution for the mortgage-backed securities market.
ABS Credit Risk Insight is the industry's first solution that enables investors to link mortgage loan-level data on the entire universe of non-agency mortgage securities to up-to-date borrower credit data. Investors using this solution for trading and modeling can better predict mortgage loan delinquency and default, identify current healthy deals and monitor changes in collateral health.
For each securitized mortgage loan, investors can monitor borrowers' changing credit health across all types of consumer debt such as credit card, auto and other mortgages. ABS Credit Risk Insight gives investors data on leading indicators of mortgage default such as updated credit scores, balances and utilization, delinquencies and defaults, monthly payments, credit inquiries and length of credit history. With data updated bi-weekly, the solution allows investors to better predict loan delinquency by adding Equifax's up-to-date borrower credit data to their models at the loan level.
"As unemployment rates continue to rise, investors are seeking new data sources that provide more precise indicators of securitized mortgage loan performance," said Steve Albert, vice president, Equifax Capital Markets.
"Listening to our customers and the industry, we have developed a solution that enables investors to see how a borrower's risk profile changes over time -- a powerful tool for assessing current mortgages that on the surface appear healthy. For the secondary market, this is a game-changing event."
Investors gain this competitive advantage through the integration of Equifax's loan level credit information with leading-edge technology from 1010data, a business intelligence service that offers a complete approach to gaining maximum insight directly from raw, loan-level data. Leveraging 1010data's platform, a statistical match is conducted between a database of anonymous credit information and the investor's mortgage loan information.
No personally identifiable information is used to execute the match and the matched credit data provided to investors is kept anonymous.
"Faced with mounting losses on private-label mortgage-backed securities, the industry must find new ways to improve default projections and differentiate between healthy and unhealthy deals," said Greg Munves, vice president, 1010data. "The right combination of technology and data can play a pivotal role in empowering investors to make sound decisions amidst this challenging macroeconomic environment. Leveraging our platform and Equifax's credit information, the new solution provides the insight and assurance investors need to make more confident trading decisions."
In addition to providing a powerful tool for assessing deal performance and valuing securities, ABS Credit Risk Insight is also used for strategic market risk analysis. With this solution, investors gain greater insight into the credit health of various market segments, vintages and geographies.
ABS Credit Risk Insight is the latest addition to Equifax's suite of Capital Markets solutions that empower businesses to make critical decisions with the most up-to-date borrower and property value information available.