A Shift in the Mortgage Landscape: The 1990s Move to Automated Credit Evaluations
- Topics:
- Market Studies,
- Strategic Leasing
- Source:
- Fannie Mae
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Overview: This article reviews the shift in the 1990s from traditional manual mortgage underwriting to mortgage scoring models and statistical automated underwriting (AU).AU has become the predominant mortgage underwriting method, helping to catalyze a broad wave of technological advancement. Still, further significant changes are likely. Examining statistical AU’s history, growth, and underlying factors and concerns, this article especially considers the question of how far AU should be relied upon to evaluate more marginal and higher-risk mortgage applicants (traditionally harder cases). Supporting a cautious, continued expansion of statistical AU into higher-risk loans, the article reveals some provocative evidence on statistical scorecards versus traditional underwriters and explores fair lending strengths of AU. Future overall prospects for likely AU and related research areas and developments are summarized.
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Format: PDF | Size: 165KB | Date: Jan 2003 | Pages: 26
