TransUnion Rolls Out Tool to Evaluate Mortgage Asset Risk

TransUnion (Chicago) is introducing its Consumer Risk Indicators service, a product designed to improve visibility into the hidden risk of mortgage assets. This solution, developed in cooperation with First American CoreLogic (Santa Ana, Calif.), a member of The First American Corporation family of companies, makes available previously missing information for Mortgage Secondary Market risk analysis and modeling.

According to TransUnion, its Consumer Risk Indicators for RMBS (Residential Mortgage-backed Securities) and Whole Loans bring comprehensive, current and historical loan-level consumer credit information to the mortgage industry for in-depth risk analysis. This includes information such as complete adjustable-rate mortgage (ARM) exposure (beyond the loan in question) and the consumer's capacity to pay. The company says this data is already proven to predict risk and consumer behavior for numerous lending products such as mortgages, auto loans and credit cards, but has previously been unavailable for mortgage-backed securities.

TransUnion says the solution will help enable industry participants develop better valuations based on the composition and risk of consumers in individual mortgage pools. The company acknowledges that although results will vary from portfolio to portfolio, initial TransUnion analysis showed an improvement in default predictions of more than 15 percent over current predictive methodologies.