The risk of default on new quarterly mortgage originations turned significantly higher as production plunged, though seasonal factors played a role.
On the $323 billion in single-family loan originations during the first-three months of this year, the weighted-average probability of default was 1.11 percent.
That was according to the Default Risk Index, which was 95.8. The index is a measure of relative changes in risk level and benchmarked against the third quarter of 2013.
VantageScore reported on Wednesday the index, which is derived from
using credit file data from TransUnion and VantageScore. The index tracks the amount of risk assumed by lenders.
Risk probability worsened from 0.99 percent in the fourth-quarter 2016, when mortgage production amounted to $488 billion and the index was just 85.4.
The deterioration
wasn’t quite so dramatic compared to the 91.4 index in the first-quarter 2016, when the probability of default was 1.06 percent and originations were $320 billion.
VantageScore noted that the latest risk levels were in line with
typical seasonal patterns.
