The Vintage Quality Index (VQI) has deceased month-over-month to 84.6 in July, matching the level from a year prior. July’s value represents restricted underwriting standards relative to our baseline level observed in January 2003, and is roughly 40% below its peak of 139.10, observed in January 2007. Since the end of 2013, the Index has remained relatively flat, fluctuating in the mid-to-high 80s after rising from lows in the 60s during the period of very tight underwriting standards during and after the housing crisis. The loosening of underwriting standards coming out of the housing crisis has been driven by increased lending to borrowers with a greater than 80% LTV, as well as higher shares of investor loans and high DTI loans. Lending to borrowers with FICO scores less than 660 remains well below historical highs (9% in July compared to 29% from 2007).
CLICK HERE to read more about the VQI – July 2016.
CLICK HERE to download the data set.