Latest Issue of First American LoanPerformance MarketPulse Report Features Deutsche Bank Study
—Study Explores the Potential Impact of New Subprime Underwriting Guidelines on Debt-to-Income Ratios; Report Also Includes National Mortgage Delinquency and Prepayment Trend Data—
October 29, 2007, SANTA ANA, Calif.
First American LoanPerformance, a member of The First American Corporation (NYSE: FAF) family of companies and a leader in residential mortgage data and analytics for the mortgage industry and Wall Street, today announced that the latest issue of its MarketPulse report is available for download at www.loanperformance.com.
This latest report features a new white paper titled, “The Impact of Underwriting Subprime ARMs at the Fully Indexed Rate: An Analysis of Debt-to-income Ratios,” by Karen Weaver, managing director, global head of securitization research and regional research head for the Americas; and Katie Reeves, director, global securitization research for Deutsche Bank.
Recently issued federal and state regulatory subprime mortgage guidance includes a requirement that lenders underwrite categories of subprime adjustable-rate mortgages (ARMs) considering borrowers' ability to make payments based on the fully indexed interest rate, rather than based on a lower initial interest rate,” said Ms. Reeves. “In this article, we look at how debt-to-income (DTI) ratios could be expected to change as a result of such a shift. In our analysis, the weighted average DTI goes from a reported 42 percent to a pro forma 52 percent following this underwriting change,” added Reeves.
The MarketPulse report also summarizes a selection of key mortgage performance statistics through March 2007, including geographic markets with the highest percentage of interest-only purchase loan originations and the highest incidence of serious delinquency and prepayment rates for prime and subprime loans.
MarketPulse is a complimentary quarterly report that presents analysis of, and insight into, delinquency and prepayment trends for the prime, subprime, home equity and mortgage-backed and asset-backed securities markets. Each issue also contains a “RiskView” section with valuable insights from thought leaders on the prime, subprime and securities mortgage marketplace. The summary data in each issue of MarketPulse is extracted from First American LoanPerformance’s industry-leading mortgage servicing and securities databases. MarketPulse can be accessed by completing the electronic subscription form at www.loanperformance.com/marketpulse.
About First American LoanPerformance
First American LoanPerformance is a subsidiary of First American CoreLogic, Inc. and a member of The First American Corporation (NYSE: FAF) family of companies. First American LoanPerformance databases track the delinquency and prepayment performance of 50 million active individual mortgage payments per month and provide loan-level information on more than $2.0 trillion in nonagency mortgage-backed and asset-backed securities. The company’s data and suite of predictive prepayment and risk modeling solutions enable mortgage originators, servicers, securities issuers and investors to make informed business decisions about credit risk, loss mitigation, customer retention, securitization and investment. For additional information, visit www.loanperformance.com and www.facorelogic.com.
About The First American Corporation
The First American Corporation (NYSE: FAF), a FORTUNE 500® company that traces its history to 1889, is America’s largest provider of business information. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within five primary business segments, including: Title Insurance and Services, Specialty Insurance, Mortgage Information, Property Information and First Advantage. With revenues of $8.5 billion in 2006, First American has approximately 2,100 offices throughout the United States and abroad. More information about the company and an archive of its press releases can be found at www.firstam.com.