Tuesday, September 23, 2008

Fitch Becomes First Rating Agency to Accept Mortgage Loans Based on VantageScore, Posted by Robert Paisola

Fitch Becomes First Rating Agency to Accept Mortgage Loans Based on VantageScore

Last update: 10:08 a.m. EDT Sept. 22, 2008

NEW YORK, Sep 22, 2008 (BUSINESS WIRE) -- Fitch Ratings announced today that it is the first rating agency with the capability to evaluate and assign ratings to mortgage loans based on VantageScore, the generic credit scoring model jointly developed by the three national credit reporting companies (Equifax, Experian, and TransUnion).
According to testing done by Fitch, VantageScore provides highly predictive evaluations of consumer creditworthiness. The three national credit reporting companies apply an identical algorithm to data, creating a more consistent score. The model can also score consumers with limited credit histories.
'The mortgage crisis has not only shown that a multitude of factors influence the performance of high risk loans, but has also underscored the need for an improved generic consumer scoring model against which mortgage lenders can more reliably make their loans,' said Group Managing Director and U.S. RMBS group head Huxley Somerville. 'Built using data that includes the dramatic rise in consumer indebtedness in recent years and regularly revalidated to ensure the model's continued predictiveness, VantageScore has shown to be more accurate than FICO because it excludes the use of authorized trade lines.'
Fitch has fully incorporated VantageScore into ResiLogic 2.1, its flagship quantitative model that provides credit risk analysis at the individual loan and pool level for residential mortgage loans. ResiLogic was recently updated to include national economic and regional performance factors, loan seasoning, and adjustments for high risk loan underwriting and mortgage insurance.
About Fitch Ratings:
Fitch Ratings is a global rating agency dedicated to providing the world's markets with independent, timely and prospective credit opinions. Fitch Ratings is headquartered in New York and London and is part of the Fitch Group, a majority-owned subsidiary of Fimalac, S.A., headquartered in Paris, France. For additional information, visit www.fitchratings.com or www.fimalac.com.
About VantageScore Solutions:
Stamford,CT-based VantageScore Solutions, LLC ( www.vantagescore.com) is an independently managed company that holds the intellectual property rights to VantageScore--a new generic scoring model introduced in March 2006. Created by America's three major credit reporting companies (CRCs) - Equifax, Experian and TransUnion--VantageScore's highly predictive model uses an innovative, patent-pending scoring methodology to provide lenders with a consistent interpretation of consumer credit files across all three major credit reporting companies (CRCs) and the ability to score more people.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
SOURCE: Fitch Ratings
Fitch Ratings, New York
Huxley Somerville, 212-908-0381
or
Media Relations:
Sandro Scenga, 212-908-0278

Copyright Business Wire 2008

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