Collateral Analytics [1], a provider of automated valuation solutions and real estate analytics products for the financial services industry, announced recently it has launched the CA Credit Risk Model. The new patent pending product is designed to offer quantitative measures of the risk and cost of potential borrower default in a residential mortgage.
"Our new Credit Risk Model can be used to help lenders set the interest rate that should be charged for a particular loan based on its loan-to-value ratio, borrower's credit score, and specific loan and property traits," says Michael Sklarz, president and CEO of Collateral Analytics.
"As such, it can be viewed as a pricing tool for an individual mortgage, mortgage portfolio, or an indicator of the credit risk among different real estate markets," Sklarz added.
The CA Credit Risk Model combines Collateral Analytics automated valuation model (AVM) with its proprietary home price forecast and mortgage performance models to predict the expected profitability of a mortgage.