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Lenders? risk managers predict delinquencies to drop

Posted on Friday, April 6, 2012 at 4:20:10 PM

FICO’s quarterly survey of bank risk professionals found a reversal in American lenders’ sentiment about consumer’s ability to repay loans, according to DS News. The survey paints a more positive picture for homebuyers and the housing market in the upcoming fiscal quarter.

Conducted for the Minneapolis-based FICO by the Professional Risk Managers’ International Association, the research found that fewer lenders anticipated a rise in delinquencies on home loan than any time since FICO began its research in early 2010. Approximately 35 percent of lenders believed delinquency rates on residential financing would increase in the next six months, in contrast to last quarter’s 47 percent.

"As unemployment falls, even modestly, and four years of deleveraging begin to pay dividends, bankers are allowing themselves to feel some optimism," Dr. Andrew Jennings, FICO’s chief analytics officer and head of FICO Labs, told DS News.

Consumers seeking a new house can find more plentiful residential financing options when lenders are positive about their ability to pay back loans. Homebuyers with good credit scores and a significant down payment can increase their chances of finding affordable housing.ADNFCR-16001052-ID-800747773-ADNFCR