Reno, Nev.-headquartered InsideValuation, a real estate valuation company, has formed a partnership with International Financing Engineering Group (IFE Group), an econometric consultancy based in Rockville, Md., to produce an accurate, ZIP-level mortgage default projection tool.
According to the companies, the combined effort has resulted in access to millions of recent loan histories and a large quantity of subprime loan default information. These data spawned the development of a default projective index, a hybrid tool that assesses the future rate of default by reflecting behavior of local median home prices.
Lenders in origination, servicing and secondary markets can use the forward projections to gauge overall risk, make loss mitigation decisions and assist in pool pricing. Mortgage risk managers can determine the relative safety of loans based on econometric and demographic variables relating to property location, such as median home price, median household income, affordability, unemployment and rent-versus-price ratios.