Reassessing Mortgage Credit Scoring: Calibrating Expectations
As 2009 begins, there are unending news reports of financial bailouts, never-before-seen corporate losses, and frozen credit markets. It will take years to sift through the rubble. Finger-pointing abounds, and one of the areas coming under intense fire is Mortgage Credit Scoring.
In this Strategic Commentary entitled, “Reassessing Mortgage Credit Scoring: Calibrating Expectations” Speer & Associates, Inc. (S&A) reexamines credit scores, their strengths and pitfalls, in light of the current U.S. mortgage crisis, and reviews the unique factors that were present during the mortgage boom. S&A contends that there is much work that should be done now in reassessing a bank’s risk management practices.
