http://www.LendingRisk.com/ Articles for business professionals in the mortgage lending and seller risk management industries. en-us Copyright 2008-2009, LendingRisk.com 150 45 http://www.lendingrisk.com/images/lr_logoart.gif http://www.lendingrisk.com/ Mon, 23 Mar 2009 08:00:00 Mon, 23 Mar 2009 08:00:00 http://www.LendingRisk.com/rss HTML-Kit thill@LendingRisk.com Service@LendingRisk.com http://www.lendingrisk.com/kpi/kpi_production_pg1.php In an effort to offer more loan products and remain competitive in today's expanded marketplace both the bank and mortgage brokers participate in correspondent or wholesale lending programs. Correspondent and wholesale lenders refer to the banks and mortgage brokers that sell them loans by........ Mon, 23 Mar 2009 08:00:00 http://www.lendingrisk.com/kpi/kpi_osdocs_pg1.php Various federal, state and local laws, in addition, to investor specific product requirements, dictate the documentation required for a complete mortgage loan file. Mortgage industry investors tend to group mortgage loan documents into two broad categories ....... Mon, 23 Feb 2009 08:00:00 http://www.lendingrisk.com/kpi/kpi_occupancy_pg1.php Occupancy and property usage types, in conjunction with other risk factors, serve as indicators of a loan's likelihood for profitable servicing. In the interest of mitigating portfolio risk, investors perform analysis to determine the distribution of occupancy and property usage types ....... Sat, 31 Jan 2009 13:00:00 http://www.lendingrisk.com/pm_pg1.php One method of managing servicing portfolio and seller risk is the implementation of a seller and servicing portfolio performance monitoring program. A properly implemented performance monitoring program identifies portfolio risk and identifies sellers that are a high risk to the investor organization. The intent of the information that follows in this article is to identify a means for managing mortgage industry seller risk; however, the principles outlined ....... Sun, 21 Dec 2008 11:00:00 http://www.lendingrisk.com/kpi/kpi_ltv_pg1.php The mortgage's Loan To Value (LTV) is a key indicator of the lender's ability to recover on its investment should a loan default occur. The Loan To Value (LTV) is the loan amount divided by the value of the property. The higher the Loan To Value ratio, the greater the monetary risks for the lender should a default occur. Lenders use the LTV ratio in conjunction with other key performance indicators (e.g. FICO Credit Score values and Debt to Income (DTI) ratios) to determine...... Sat, 25 Oct 2008 09:00:00 http://www.lendingrisk.com/kpi/kpi_loan_purpose_pg1.php The loan purpose type specifies the purpose for which the loan proceeds will be used. The loan purpose may be to purchase a home or to refinance an existing mortgage to obtain a lower interest rate or to get cash. Mortgage industry investors track and report the distribution of loan purpose types in their portfolio in order to mitigate the risk associated with various loan purpose types. In general, buying a home represents less of a risk than refinancing an existing mortgage. Refinance transactions in which the borrower takes out little or no equity (cash) represents less risk than ...... Wed, 15 Oct 2008 18:30:00 http://www.lendingrisk.com/kpi/kpi_geographic_pg1.php Statistical models show that geographic location in conjunction with other key performance indicators can determine a loan's likelihood for profitable servicing. In the interest of mitigating portfolio risk, investors perform analysis to determine the Geographic Concentration of loans in their servicing portfolio. Fri, 26 Sep 2008 23:00:00 http://www.lendingrisk.com/kpi/kpi_funding_quality_pg1.php Lenders, based on investors' guidelines, make a lending decision and fund the mortgage loan. A lender's efficiency at funding a loan is quantifiable and has a direct impact on their investor's profit margin in the funding and subsequent servicing of the loan. Mon, 25 Aug 2008 22:40:00 http://www.lendingrisk.com/kpi/kpi_fico_pg1.php In the mortgage industry, a borrower's credit score is one of the key indicators used to determine the likelihood that a borrower will make their mortgage payment. A credit score condenses a borrowers credit history into a single number. Credit Scores should NOT be confused with Mortgage Scores which are custom scoring models designed to predict the risk of delinquency for a mortgage loan. Sat, 26 Jul 2008 17:00:00 http://www.lendingrisk.com/kpi/kpi_epd_pg1.php In the mortgage industry an Early Payment Default (EPD) is a mortgage loan that goes 90+ days delinquent or into a default status in its first year. Early Payment Default (EPD) is one of the strongest indicators of possible mortgage fraud. Mortgage industry investors are very concerned with identifying EPDs and performing quality control checks to determine if mortgage fraud has occurred. Sat, 21 Jun 2008 23:55:00 http://www.lendingrisk.com/kpi/kpi_early_payoffs_pg1.php In the Mortgage Industry, Early Payoff a.k.a. as "churning", "prepayment" or "borrower runoff" is the process whereby borrowers refinance their current mortgage for a better offer with a different lender. Surprisingly, many mortgage industry investors are unaware how much early payoffs are costing them, despite the fact that the practice has increased at an alarming rate. Most investors are much more focused on gaining new business; a process that demands the promotion of more early payoff mortgage loan products. Fri, 18 Apr 2008 00:08:00 http://www.lendingrisk.com/kpi/kpi_dti_pg1.php A borrower's Debt to Income (DTI) is the ratio of monthly debt payments to monthly gross income. The borrower's DTI is a key indicator of his ability to repay the loan. Lenders use a Housing Ratio (monthly housing expenses divided by monthly income) and a total DTI ratio (total monthly debt payment including the monthly housing expenses divided by monthly income) as factors in determining whether a borrower's income qualifies for the requested mortgage loan. Tue, 18 Mar 2008 21:08:00