“To date”, said Pulatie, “there has been no universal method for determining the default risk of loans. Lenders, including Fannie & Freddie, have relied upon FICO and Debt to Income Ratios to determine whether to fund a loan. In the 2000’s, this practice obviously failed. Now, lenders and investors are fearful of investing in loans until they can be sure of the risk involved in any one loan. LDR solves the problem.”
The LDR Score was the result of in-depth examination of over 5000 performing and defaulted mortgage loans and analysis of over 5000 additional loan data sets. Default factors were identified and catalogued, and the results incorporated into the LDR algorithm. Studies have indicated that LDR improves the ability to predict default by greater than 60% over more conventional methods.
The LDR Score also includes an “Ability to Repay” section. “Under Dodd Frank, a lender will have a requirement to determine the ability of a person to repay the loan and a Fiduciary Duty to the borrower. Attorneys representing homeowners have already formulated arguments to attack lenders for violation of these provisions in the future. The Ability to Repay section is designed to reduce or eliminate these actions.” says Pulatie.
LFI is aggressively looking for lenders with the vision and dedication to do what is needed to restore the housing market and lending industry. Particularly, LFI is looking to form partnerships in bringing LDR to market, and to assist in restarting Private Sector Lending.
For more information, visit www.lfi-analytics.com , email Patrick@LFI-
About LFI Analytics
LFI Analytics has been involved in document examination services for five years. It has provided services to lenders, banks and to homeowners in litigation involving lending practices, and has testified in court. LFI’s long term goal is to develop programs and services that will promote housing recovery. LDR is the first of many programs in development that LFI will bring to market.