Friday, March 12, 2010

Fun with FICO

Isn't this a set of interesting statistics?

In 2005, 46% of consumers who opened a new mortgage had a FICO score less than 700. In 2008 this percentage had dropped to 25% . Fair Isaac (creators of the FICO score) reports that borrowers in the Northeast continually present the least amount of default risk nationally for real estate loans.

It's good news that creditworthiness increased in the last few years. I know someone who actually got a mortgage offer in the mail for their dog in 2005. Their dog! <le sigh>

It's pretty common wisdom that the foreclosure rates need to fall in order for a real recovery in real estate to happen. Maybe the 2008 and beyond buyers who were more creditworthy won't default on their mortgages and we're near the light at the end of the tunnel. On the other hand, if the dismal unemployment rate continues, that'll mean more foreclosures and more uncertainty in the market.

Wishing I had a crystal ball. . . .

(stats provided by Rob Chrisman of Mortgage News Daily)