UFA Default Risk Index Rises in Q1 – NMP Skip to main content

UFA Default Risk Index Rises in Q1

NationalMortgageProfessional.com
Mar 21, 2014

The UFA Default Risk Index for the first quarter of 2014 is 114, up from the recent low of 76 four quarters ago in our baseline scenario. Under current economic conditions, investors and lenders should expect defaults on loans currently being originated to be 14 percent higher than the average of similar loans originated in the 1990s, due solely to the local and national economic environment. That’s a key finding of the latest UFA Mortgage Report by University Financial Associates of Ann Arbor, Michigan. “The recent increase in the Index is due to the steep increase in mortgage rates in recent quarters,” said Dennis Capozza, who is the Dale Dykema professor of Business Administration in the Ross School of Business at the University of Michigan, and a founding principal of UFA. “Rates rose by more than 100 bps last year, making loans originated at the lower rates less likely to default, because the existing low rate mortgages are more valuable to the borrower. On the other hand, current borrowers in the present interest rate climate are faced with higher monthly payments and are slightly more likely to default than if rates had remained constant.” The UFA Default Risk Index measures the risk of default on newly originated prime and nonprime mortgages. UFA’s analysis is based on a “constant-quality” loan, that is, a loan with the same borrower, loan and collateral characteristics. The Index reflects only the changes in current and expected future economic conditions, which are much less favorable currently than in prior years.
Published
Mar 21, 2014
Chairman Xu Sells Off Personal Assets To Avoid Default

The Evergrande saga continues as Chairman Xu Jiayin sells off 7 billion yuan ($1.1 billion) of his personal assets to prop up the deflating property giant.

Industry News
Nov 23, 2021
OptiFunder Secures $25 Million In Capital

OptiFunder, a warehouse management system provider for mortgage originators, raised $25 million in additional capital lead by Arthur Ventures, a growth capital firm focused on high-growth, founder-led and capital efficient B2B software companies.

Tech
Nov 23, 2021
Mortgage Company Donates $100K To High School In Memory Of Fallen U.S. Navy Corpsman

Cleveland-based CrossCountry Mortgage donated $100,000 to Milan Edison High School in memory of U.S. Navy Corpsman, Maxton W. Soviak, who died while assisting in the evacuation of Americans and refugees in Afghanistan in August.

Community
Nov 23, 2021
MISMO Seeks To Standardize Pre-Closing Title Data

Forming workgroup to focus on standardizing document datasets to streamline process and increase efficiency.

Industry News
Nov 23, 2021
Pandemic's Impact On Real Estate Around The World

Although the impact of the COVID-19 pandemic on the real estate industry has been well-documented within the United States, it’d be prudent to know how the global event impacted other countries as well. 

Industry News
Nov 22, 2021
Housing Market Potential Strengthens Modestly

First American Financial Corporation's Potential Home Sales Model for October 2021 reported that potential existing-home sales increased 0.1% month-over-month to 6.27 million, with household formation continuing to grow, largely driven by millennials.

Analysis and Data
Nov 22, 2021