Investment Properties and Lower-Doc Loans Pushing Credit Risk Higher


Posted To: MND NewsWire

While it is still within what is considered normal limits, credit risk did move higher among loans originated during the second quarter of the year. CoreLogic says its Housing Credit Index (HCI) increased by 20 points when compared to the second quarter of 2016, to 117. The HCI measures the relative increase or decrease in credit risk for new mortgage loan originations when compared to earlier periods across six risk categories. The six are borrower credit score, debt-to-income ratio (DTI), loan-to-value ratio (LTV), investor-owned status, condo/co-op share and documentation level. CoreLogic says risks in the three borrower credit categories, credit score, DTI, and LTV, improved during the quarter. Credit scores moved higher by 9 points to an average of 745, LTV’s were down from 87.4 percent…(read more)

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