Fair Isaac Unveils HEL Scoring Model

Fair, Isaac and Co. has created a special portfolio model to help lenders overcome the shortage of data available to create scoring models.The model is based on the experience of approximately 196,000 borrowers. The California-based company's special portfolio model "rank orders the likelihood of someone becoming a 'bad' payer based on experiences across the board from A loans to C+ loans, and includes high-LTV loans of over 100%," Sally Relova, Fair Isaac's project manager for analytic R&D, told MortgageWire. She said the special portfolio models are unique because they include a database of good and bad loans. Many lenders find it "very difficult to get enough bad loans," Ms. Relova said. "Most portfolios are pretty clean, so lenders cannot develop custom scorecards because their portfolios are too limited." Without a full range of loans, "you cannot create a good model," she said.