Risk drops for new mortgages

- Posted by Tom Quinn, FICO® Score Product Manager

As reported in our latest FICO Labs News Flash, our analysis shows that risk on new residential mortgages in the U.S. is decreasing.  Specifically, borrowers who opened new mortgages in May-June 2009 had much lower delinquency rates on those mortgages than borrowers who opened new mortgages in May-June 2008. 

With stricter underwriting standards in place, this isn’t a big surprise — lenders are more cautious about who they make mortgage loans to, and consumers are more cautious about taking out mortgages.

The table tells the story, but it helps if you know how to read a “log odds” table. In case you don’t, we’ve included a version of the same chart showing how the chart is scaled.