RiskSpan Unveils Enhanced Credit Risk Model for Non-Qualified Mortgage Market

RiskSpan, a prominent analytical firm, has officially rolled out an updated credit risk assessment tool tailored for the evolving non-qualified mortgage (non-QM) segment. The newly introduced Credit Model 7.1 is built to provide more precise evaluations of loan performance and potential default scenarios for these distinct lending products. This development comes at a time when the non-QM market is showing robust expansion. According to a recent HousingWire report, the issuance of non-QM loans saw a substantial increase, rising by 97% to reach an estimated $20.9 billion during the third quarter of 2023. This growth underscores the increasing relevance of specialized analytical instruments in this financial niche. Credit Model 7.1 represents a significant advancement in RiskSpan's offerings, developed using an extensive dataset comprising $87 billion in unpaid principal balance (UPB) from a diverse portfolio of non-QM loans. This broad historical data allows the model to capture intricate patterns and risk factors unique to this type of mortgage, which caters to borrowers who do not meet conventional lending criteria. The non-QM loan category serves various borrowers, including self-employed individuals, those with non-traditional income streams, or those with unique credit profiles. Accurately assessing the risk associated with these loans is crucial for lenders, investors, and secondary market participants to manage portfolios effectively and make informed decisions. The launch of this specialized model addresses a growing need within the mortgage industry for sophisticated tools that can navigate the complexities of non-QM lending. As the volume of these loans continues to rise, the demand for reliable risk analytics becomes even more pronounced. RiskSpan aims to empower market participants with enhanced predictive capabilities, thereby fostering greater confidence and stability in this expanding sector of the housing finance market.