Even as interest rates remain at near-record lows, mortgage originations declined for the second quarter in a row in Q2 2011 to $268 billion, a 19 percent decline over the previous quarter. Refinance activity that spurred originations in 2010 has not been as prevalent this year. Listen to our recent Webinar on consumer credit trends and retail spending. Source: Experian-Oliver Wyman Market Intelligence Reports.  

By: Mike Horrocks Henry Ford is credited to have said “Coming together is a beginning. Keeping together is progress. Working together is success.”   This is so true with risk management, as you may consider bringing in different business units, policies, etc., into a culture of enterprise risk management.  Institutions that understand the concept of strength from unity are able to minimize risks at all levels, and not be exposed in unfamiliar areas. So how can this apply in your organization?  Is your risk management process united across all different business lines or are there potential chinks in your armor?  Are you using different guidelines to manage risk as it comes in the door, versus how you are looking at it once it is part of the portfolio, or are they closely unified in purpose? Now don’t get me wrong, I am not saying that blind cohesion is right for every risk management issue, but getting efficiencies and consistencies can do wonders for your overall risk management process.  Here are some great questions to help you evaluate where you are: Is there a well-understood risk management approach in place across the institution? How confident are you that risk management is a core competence of your institution? Does risk management run through the veins of the institution, or is it regarded as the domain of auditors and compliance? A review of these questions may bring you closer to being one in purpose when it comes to your risk management processes.  And while that oneness may not bring you Zen-like inner peace, it will bring your portfolio managers at least a little less stress.

VantageScore® Solutions LLC polled risk professionals about how they are measuring score performance, and 60 percent of respondents said they are now using metrics beyond the Kolmogorov-Smirnov (KS) statistic value. One new metric is score consistency, which is defined as the ability to provide near-identical risk assessment of a consumer across multiple credit reporting agencies. In other words, this means having confidence that when a consumer gets a 700 from one agency, he or she is likely to get a 700 from another agency. The other metric that risk managers referenced was stability, which is defined as the ability of a model to retain its predictive accuracy across an extended time frame. Learn more about the VantageScore credit score® Source: VantageScore newsletter, April 2011 VantageScore® is owned by VantageScore Solutions, LLC