Untitled - Joint Center for Housing Studies - Harvard University
Untitled - Joint Center for Housing Studies - Harvard University
Untitled - Joint Center for Housing Studies - Harvard University
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Note from Figure 9 that the estimated coefficients <strong>for</strong> FICO5, FICO6, and FICO7, are not<br />
statistically significant (with p-values well in excess of 0.05) indicating that there is no<br />
significant difference in mortgage rates <strong>for</strong> these three FICO groups <strong>for</strong> Prime loans. Also note<br />
that FICO6 is not significant <strong>for</strong> Alt-A loans but all of the estimates are significant <strong>for</strong> the Nonprime<br />
data.<br />
These results are consistent with the results in Figure 10, which gives the average<br />
mortgage coupon and simultaneous 95% confidence intervals by FICO score. The average<br />
mortgage coupons and the confidence intervals are essentially identical <strong>for</strong> FICO scores between<br />
621 and 680, <strong>for</strong> prime loans. We plot these results in Figure 11; note the relative risk-based<br />
pricing across the three product lines as well as across the FICO score levels.<br />
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