Recent Items   Posted on by          Gee, even though there is a
big difference between a 72% default rate and a 55.1% default
rate (as in 30%), FICO says this doesn’t matter, 1 in 2 is so
bad that they don’t care how much worse nearly 2 in 3 is
relative to that.  But there is a pretty serious problem with
their argument. Go look at the itty bitty print under that
table. The people that are counted in this study first started
looking wobbly in the 2007 to 2009 period. As readers may
recall, that was during the big subprime reset period. Those
folks were much less salvageable than the current wave of
defaulters, who are being hit by traditional causes of default:
job loss or wage reductions, divorce, medical emergency, with
more than usual in the first category thanks to the lousy state
of the economy.  A second reason that it’s dubious to apply
conclusions from that period to now is servicers have changed
their posture on short sales. Until very recently, they were
uncooperative, to the point that in Los Ange