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Reporting Credit Score Distribution Statistics

Once the necessary mortgage loan servicing data is available, the investor runs a Seller Credit Score Distribution report that generates loan Credit Score statistics by seller. Seller Credit Score Distribution reports vary depending on the reporting needs of the investor. The example Seller Credit Score Distribution report detailed in this article is intended to fulfill an investor requirement to report month end active servicing credit score distribution statistics by seller.

Creating the Report...
Report Seller Credit Score Distribution Statistics
The following steps generate a report of the seller's active servicing Credit Score distribution. This is accomplished through the creation of Credit Score Distribution reporting buckets (e.g. < 620, > 620). Each distribution bucket is then reported as a percentage of active servicing.
Step #1
The seller's total active servicing is calculated.

The seller's total active servicing is equal to the sum of the principal amount of all loans in the investor's servicing portfolio, for the seller, where the loan's status is Active, Repurchase, Bankruptcy, Foreclosure, Prepayment or Early Payoff for the period calculated. Typically, the only loans excluded by an investor when calculating the total active servicing for a seller are those loans that have been sold servicing released by the investor or loans that are still on the investor's servicing system but considered paid in full and not in a prepayment or early payoff status.

Step #2
The seller's total active servicing by Credit Score distribution report bucket is calculated.

The seller's total active servicing by Credit Score is equal to the sum of the principal amount of all loans in the investor's servicing portfolio, for the seller, by the loan's Credit Score where the loan is in an active status.

Step #3
The seller's active servicing Credit Score percentages by Credit Score distribution reporting bucket are calculated.

In this step the report is retrieving the seller's active servicing total from Step #1 and comparing it to the active servicing totals with Credit Scores, from Step #2, and grouping where the Credit Score value is less than or equal to the Credit Score distribution bucket range that the investor wants to report. The resulting percentage is used to report, by seller, the percentage of loans with Credit Scores that fall into the Credit Score bucket range that the investor wants to report.

Step #4
Repeat Step #3 to create additional Credit Score distribution buckets.

NOTES:
Many Credit Score Distribution reporting scenarios exist. One thing to consider when performing analysis to report Credit Score Distributions is:
  • Credit Score Distribution reports for a seller are most effective when Credit Score distributions are reported in conjunction with other Key Performance Indicators or seller risk factors. For example, a grid that shows the percentage of loans with a Credit Score <=620 and a Loan To Value (LTV) ratio >95% provides a more accurate indication of the level of risk associated with the loan than the credit score by itself.
A Seller Credit Score Distribution report similar to the Sample Credit Score Distribution Report in the Sample Credit Score Distribution Report section of this article can be generated by the investor for distribution to the seller.


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