Milliman - mortgage default and repurchase scores
Milliman is one of the largest independent actuarial consulting firms in the world. Its Mortgage Banking Practice provides analytical solutions to the mortgage banking industry. Through the LoanHD® Loan Scoring Module, both Milliman mortgage default and repurchase scores are available directly through the platform.
The Mortgage Default Score can help lenders analyze and monitor the credit quality of new production, allocate servicing resources, develop underwriting guidelines and pricing, just to name a few of its uses. It is developed from a dynamic econometric model that combines three important components of mortgage risk: Borrower, Underwriting, and Economic. It can provide a lifetime default rate estimate at either loan origination or for seasoned mortgages.
The Repurchase Score provides an estimate of lifetime repurchase risk from either Fannie Mae or Freddie Mac at origination. The probability of repurchase for a given mortgage is estimated conditional on default and on non-default. The score can be used in pre- or post-funding targeted quality control reviews to evaluate and consistently compare the quality of loans being originated by different offices, underwriters, or channels and flag correspondents that are delivering higher-risk loans. It is a dynamic model that can also be used to analyze repurchase rates, set reserves, and monitor trends in repurchase and loan losses.www.Milliman.com/mortgage