©2014 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or re...
2©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
 Reflection on the Great
Recession
 De...
3©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
What are fallen angels?
Fallen Angels ar...
4©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Boomerang Buyers are
mortgage borrowers ...
5©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Reflection on the Great Recession
End re...
6©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Historical foreclosure rates
0.0
0.2
0.4...
7©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Historical number of short sales
0
10,00...
8©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Data analysis
9©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Analysis design
Now compared to pre-rece...
10©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Different types of buyers
At the time o...
11©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Rate of foreclosures that boomeranged i...
12©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
…and short sales showing a similar tren...
13©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Analysis design
Focus on post-recession...
14©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
724 736
570
622634
712
400
450
500
550
...
15©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
731 742
598
656657
731
400
450
500
550
...
16©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Average mortgage balance comparison
$25...
17©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
How are Boomerang buyers paying debts n...
18©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Boomerang buyer current delinquency rat...
19©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Boomerang buyer current delinquency rat...
20©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Strategic defaulters
Individuals identi...
21©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Strategic defaulters returning faster
D...
22©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Strategic defaulters
Current delinquenc...
23©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Strategic defaulters
Current delinquenc...
24©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Why is this important to your business?
25©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Understand the fallen angel
FALLEN ANGE...
26©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
 VantageScore® 3.0
 Premier Attribute...
27©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
For additional information, please cont...
28©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Visit the Experian Expert Bar to learn ...
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Vision 2014: What Happened To the Fallen Angels from the Great Recession?

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This session will analyze “fallen angels” who had unexpected default during the Great Recession and evaluate how they are recovering and performing on various types of debt. We will address whether these consumers can be trusted again.

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Vision 2014: What Happened To the Fallen Angels from the Great Recession?

  1. 1. ©2014 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. What happened to the fallen angels from the Great Recession? Michele Raneri Experian #vision2014
  2. 2. 2©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Reflection on the Great Recession  Definitions  Analysis  Targeting Agenda
  3. 3. 3©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. What are fallen angels? Fallen Angels are consumers who had unexpected default during the Great Recession and are now recovering, but have they come back into grace and can they can be trusted again?
  4. 4. 4©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Boomerang Buyers are mortgage borrowers who have foreclosed or short sold and have since opened a subsequent mortgage What are boomerang buyers?
  5. 5. 5©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Reflection on the Great Recession End recession Q1-2013 based on unemployment down below 8% from 10% Dec 2007 Jun 2009 Jan 2013 Technical Recession Recovery Lag
  6. 6. 6©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Historical foreclosure rates 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Q179 Q180 Q181 Q182 Q183 Q184 Q185 Q186 Q187 Q188 Q189 Q190 Q191 Q192 Q193 Q194 Q195 Q196 Q197 Q198 Q199 Q100 Q101 Q102 Q103 Q104 Q105 Q106 Q107 Q108 Q109 Q110 Q111 Q112 Q113 ForecloseRate(%) Source: Mortgage Bankers Association National Delinquency Survey
  7. 7. 7©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Historical number of short sales 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 2007Q2 2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 NumberofShortSales Source: Mortgage Bankers Association National Delinquency Survey Only displayed data Q207+
  8. 8. 8©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Data analysis
  9. 9. 9©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Analysis design Now compared to pre-recession 2001 2007 2013 Pre-recession Performance Window 2006 2012 Post-recession Performance Window Timeframes evaluated: 2001-2007 vs. 2007-2013
  10. 10. 10©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Different types of buyers At the time of foreclosure or short sale… Owner occupied FIRST MORTGAGE TRADE1 Second home FIRST MORTGAGE TRADES2 Investor FIRST MORTGAGE TRADES3+
  11. 11. 11©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Rate of foreclosures that boomeranged is down 71% 2001-2007 Performance Window 2001-2007 Foreclosures Boomerangs Boomerang rate Owner occupied 1,455,360 89,440 6.15% Second home 171,800 68,940 40.13% Investors 34,360 15,480 45.05% TOTAL 1,661,520 173,860 10.46% 2007-2013 Performance Window 2007-2013 Foreclosures Boomerangs Boomerang rate Owner occupied 5,429,420 114,100 2.10% Second home 756,580 43,440 5.74% Investors 567,840 45,120 7.95% TOTAL 6,753,840 202,660 3.00% 306% 17% -71%Change
  12. 12. 12©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. …and short sales showing a similar trend, down 68% 2001-2007 Short Sales Boomerangs Boomerang Rate Owner occupied 62,840 7,780 12.38% Second home 16,040 9,900 61.72% Investors 4,060 2,760 67.98% TOTAL 82,940 20,440 24.64% 2007-2013 Short Sales Boomerangs Boomerang Rate Owner occupied 808,960 44,340 5.48% Second home 209,080 28,200 13.49% Investors 147,680 18,960 12.84% TOTAL 1,165,720 91,500 7.85% 1,305% 348% -68%Change 2001-2007 Performance Window 2007-2013 Performance Window
  13. 13. 13©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Analysis design Focus on post-recession 2001 2007 20132012 Post-recession Performance Window Timeframes evaluated: 2001-2007 vs. 2007-2013
  14. 14. 14©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 724 736 570 622634 712 400 450 500 550 600 650 700 750 Fallen Angels 12.4% 3.3% VantageScore® migration of foreclosed population 625 652 539 590598 680 400 450 500 550 600 650 700 750 Overall Before Event As of Event After Event 4.3% 4.3% Foreclosure Non-Boomerang Buyer Foreclosure Boomerang Buyer Foreclosure Non-Boomerang Buyer Foreclosure Boomerang Buyer
  15. 15. 15©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 731 742 598 656657 731 400 450 500 550 600 650 700 750 Fallen Angels 1.5% 10.1% VantageScore® migration of short sale population 655 683 568 628626 705 400 450 500 550 600 650 700 750 Overall Before Event As of Event After Event 3.2% 4.4% Short Sale Boomerang Buyer Short Sale Non-Boomerang Buyer Short Sale Boomerang Buyer Short Sale Non-Boomerang Buyer
  16. 16. 16©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Average mortgage balance comparison $259,617 $262,794 $313,490 $279,573 $154,465 $168,517 $193,464 $181,974 Fallen Angels Subprime Foreclosure Short Sale Non-Boomerang Buyer Boomerang Buyer Non-Boomerang Buyer Boomerang Buyer 68% 62% 56% 54%
  17. 17. 17©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. How are Boomerang buyers paying debts now?
  18. 18. 18©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Boomerang buyer current delinquency rates Foreclosed population 3.0% 7.4% 4.1% 5.5% 8.4% 19.8% 7.7% 0.0%2.8% 7.1% 3.7% 3.6% 0% 5% 10% 15% 20% 25% Auto Bankcard Retail Mortgage Boomerang Non-Boomerang US Avg 3.8% 7.2% 4.2% 4.4% 2.2% 6.8% 4.6% 5.6% 2.1% 8.4% 3.4% 8.5% 2.8% 7.1% 3.7% 3.6% 0% 2% 4% 6% 8% 10% Auto Bankcard Retail Mortgage Owner Occupied Second Home Investor US Avg
  19. 19. 19©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Boomerang buyer current delinquency rates Short sold population 1.7% 4.6% 3.2% 1.8% 0.9% 5.0% 3.3% 2.6% 1.5% 4.5% 1.3% 4.1% 2.8% 7.1% 3.7% 3.6% 0% 2% 4% 6% 8% 10% Auto Bankcard Retail Mortgage Owner Occupied Second Home Investor US Avg 1.4% 4.7% 2.8% 2.5% 4.9% 15.2% 6.6% 0.0%2.8% 7.1% 3.7% 3.6% 0% 4% 8% 12% 16% Auto Bankcard Retail Mortgage Boomerang Non-Boomerang US Avg
  20. 20. 20©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Strategic defaulters Individuals identified on the credit file as consumers who stopped paying on their first mortgage while paying perfectly on all other debts are STRATEGIC DEFAULTERS
  21. 21. 21©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Strategic defaulters returning faster Data from 2007-2013 @ Time of Default 23.3% 8.6% 9.7% 5.8% Foreclosure Short Sale Boomerang Non-Boomerang The percentage of boomerang buyer population who were strategic defaulters at the time of their event
  22. 22. 22©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Strategic defaulters Current delinquency rates on foreclosed population 2.4% 3.9% 3.1% 1.9% 0.8% 3.3% 2.5% 3.5% 1.3% 2.9% 2.6% 6.7% 2.8% 7.1% 3.7% 3.6% 0% 2% 4% 6% 8% Auto Bankcard Retail Mortgage Owner Occupied Second Home Investor US Avg 1.7% 3.5% 2.8% 3.7% 2.8% 7.1% 3.7% 3.6% 0% 2% 4% 6% 8% Auto Bankcard Retail Mortgage Boomerang US Avg
  23. 23. 23©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Strategic defaulters Current delinquency rates on short sold population 0.0% 1.9% 1.3% 0.6% 0.0% 3.3% 3.3% 0.0%1.0% 1.4% 0.5% 2.9% 2.8% 7.1% 3.7% 3.6% 0% 2% 4% 6% 8% Auto Bankcard Retail Mortgage Owner Occupied Second Home Investor US Avg 0.5% 1.8% 1.0% 1.8% 2.8% 7.1% 3.7% 3.6% 0% 2% 4% 6% 8% Auto Bankcard Retail Mortgage Boomerang US Avg
  24. 24. 24©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Why is this important to your business?
  25. 25. 25©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Understand the fallen angel FALLEN ANGELS Credit Savvy Higher VantageScores® Complex Performance
  26. 26. 26©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.  VantageScore® 3.0  Premier AttributesSM  Strategic Default AttributesSM  Sophisticated segmentation  New suite of boomerang buyer attributes How to identify fallen angels
  27. 27. 27©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. For additional information, please contact: Michele.Raneri@experian.com | Twitter Handle: MLRaneri Hear the latest from Vision 2014 in the Daily Roundup: www.experian.com/vision/blog @ExperianVision | #vision2014 Follow us on Twitter
  28. 28. 28©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Visit the Experian Expert Bar to learn more about the topics and products covered in this presentation.

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