TitleFAQ: CreditForecast 4.0 Blended Series
AuthorAndrew Vickrey, Mustafa Akcay
Question
How are blended series within CreditForecast 4.0 calculated?
Answer
| Loan to Value Ratio |
| Mnemonic : |
FEQLTVM |
| Description : |
Ratio of mortgage balances outstanding to value of homes. |
| Calculated as : |
Total Mortgage Debt / ( Housing Stock * Median Home Price ) |
| Forecasted : |
Yes |
| Frequency : |
Quarterly |
| Geography : |
All |
| |
|
| |
|
| Equity per Household |
| Mnemonic : |
FEQEQHHM |
| Description : |
Consumers' equity in their homes. |
| Calculated as : |
( ( Housing Stock * Median Home Price ) - Total Mortgage Debt ) / Number of Households |
| Forecasted : |
Yes |
| Frequency : |
Quarterly |
| Geography : |
All |
| |
|
| |
|
| Equity per Housing Stock |
| Mnemonic : |
FEQEQHSM |
| Description : |
Equity ion Housing Stock. |
| Calculated as : |
( ( Housing Stock * Median Home Price ) - Total Mortgage Debt ) / Housing Stock |
| Forecasted : |
Yes |
| Frequency : |
Quarterly |
| Geography : |
All |
| |
|
| |
|
| Equity Extraction to Income Ratio |
| Mnemonic : |
FEQEQEXM |
| Description : |
Extraction of equity on existing homes as a ratio of disposable income. |
| Calculated as : |
( Change in Mortgage Debt - ( New Building Mortgage Originations - Amortization ) ) / Personal Disposable Income |
| Forecasted : |
Yes |
| Frequency : |
Quarterly |
| Geography : |
All |
| |
|
| |
|
| Debt Service Burden |
| Mnemonic : |
FEQSDEBTM |
| Description : |
Ratio of required household debt payments to disposable income. |
| Calculated as : |
( Sum of Required Mortgage, Auto Loan, Bankcard and Other Loans Debt Payment ) / Personal Disposable Income |
| Forecasted : |
Yes |
| Frequency : |
Quarterly |
| Geography : |
All |
| Notes : |
Required Mortgage Payment: Mortgage High Credit data from Equifax and historic Mortgage Originations, Mortgage Interest Rates and Mortgage Terms data are used. The required payments are calculated using an actuarial formula. |
| Required Auto Loan Payment:Auto Loan High Credit data from Equifax and historic Auto Loan Interest Rates and Loan Terms data are used. The required payments are calculated using an actuarial formula. |
| Required Bankcard and Other Loans Payment: Balances data from Equifax are used for all lines except for Auto and Mortgage. A 2.5% minimum required payment rule is applied. |
| |
| Debt Service Burden is calculated as the ratio of the sum of the above three components to Personal Disposable Income. |
| |
| The Debt Service Burden is calculated as described above for the US. Although our calculations yield very close numbers to "US Household Debt Service Ratio" provided by the Fed, we eliminate any differences by constraining our numbers to Fed's numbers. The regional Debt Service Burden series are created after sharing out the Debt Payments for US to regions. |
Related Releases
CreditForecast 4.0 - Forecast