Heavy demand for data on volatile but highly profitable subprime mortgage loans has prompted a conventional mortgage research firm to create a new data base.
Mortgage Information Corp., San Francisco, last week launched its B and C data base, which tracks delinquencies and foreclosures by market, product, and key risk characteristics.
Information about subprime loan performance is hard to come by, said Craig Sandall, data director for the National Home Equity Mortgage Association, the industry's trade group.
"There's no reporting requirement" for most subprime lenders, he explained. "And, they consider this information competition-sensitive."
Banks and investors have been attracted to subprime lending in recent years, but some of the more conservative have balked because of the lack of data, Mr. Sandall said.
"Companies like banks are used to having everything spelled out for them," he said. But the search for consistent information in the industry is often "thwarted at every turn," he said.
Several rating agencies have developed scoring and performance tracking systems for specific pools of subprime loans, but none has been adopted as an industry-wide standard.
The Mortgage Information data base contains information on more than 600,000 loans originated from 1994 to the present. The firm expects the number of loans tracked to double in the next few months.
Lenders that contribute information will be able to monitor performance in their portfolios by region, product type, and loan-to-value ratio. Currently, thirteen lenders are participating.
To date, Mortgage Information's Southeast-Central area contains the most seriously delinquent subprime mortgage loans; about 5.75% of all loans in the region are more than 90 days overdue. Loans in the Mountain region are performing the best, with just 2.41%.
The system is expected to be the first of several comprehensive data bases to hit the market.