Experian Capital Markets adds Fico credit scores to MBS system
04 October 2010 | 3336 views | 0
FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced that Experian® Capital Markets is adding, as an option, the most advanced FICO® credit score to its CreditHorizonsSM for Securities solution.
Sellers and investors of mortgage-backed securities use Experian's CreditHorizons for Securities to surmount the limitations of loan-level data when analyzing credit risk in mortgage-backed securities. The addition of the FICO Score, branded by Experian® as the Experian/FICO Risk Model, will give RMBS managers, marketers and investors deeper insights for evaluating creditworthiness of the underlying mortgages in non-agency loan pools.
CreditHorizons for Securities is used to improve pricing strategies on the sell side while helping buyers make investment decisions with greater confidence and improve risk management. The FICO Score brings an added dimension of predictive power, enabling users to better assess risks of delinquencies and defaults from securitized mortgages.
Investors benefit from using fresh FICO scores instead of scores calculated when loans were originated, since recently reported changes in borrowers' credit behavior will likely change their credit risk.
"FICO is the dominant provider of credit scoring solutions to the mortgage industry," said Jordan Graham, executive vice president of Scores at FICO. "As an extension of this position, we are excited to offer more comprehensive solutions to support the needs of the secondary market and securitization process for US mortgages. We believe this combination of Experian Capital Markets and FICO solutions will increase investor confidence and make for a more efficiently functioning market."