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Definitions and Methods
January — June 2008
The OCC and OTS Mortgage Metrics Report uses standardized definitions for three categories of mortgage creditworthiness: prime, Alt-A, and subprime. These are defined using ranges of borrowers' credit scores at the time of origination, as follows: prime-660 and above; Alt-A-620 to 659; and subprime-below 620.
Roughly 15 percent of loans in the data were not accompanied by credit scores. The report classifies these loans "other." This group of loans includes a mix of prime, Alt-A, and subprime loans, and is, in large part, as the result of acquisitions of mortgage portfolios from third parties where scores were not readily available. The OCC and OTS are working with the participating banks and thrifts to obtain and include credit scores with future submissions to reduce the percentage of loans in this category.
Other standard definitions in the report include:
The statistics and calculated ratios in this report are based on the number of loans rather than on the dollar balance outstanding.
3 In addition to the two loss mitigation actions captured in this report-payment plans and loan modifications-mortgage servicers reported several alternative loss mitigation actions, including HomeSaver Advance, FHASecure, partial claims, new subsidy programs, and refinances with principal forgiveness. The agencies plan to include a broader range of loss mitigation actions in future reports.
4 Many new foreclosures never result in the ultimate foreclosure sale or loss of the borrower's home, because banks and thrifts simultaneously pursue other loss mitigation actions and borrowers may act to return their mortgages to current and performing status.