themortgagellm™12-month EPD score for a 700 FICO conforming loan
“Score this loan for 12-month EPD: FICO 700, DTI 40, LTV 95, note rate 7.0%, Fannie pathway.”
Response
EPD 12-mo (v2) model output for the loan you described:
- Input summary: conforming loan, FICO 700, DTI 40, LTV 95, note rate 7.0%, Fannie pathway
- Calibrated probability of 60+DQ within first 12 months: 1.33%
- Risk band: BASE
- Operating recommendation: STANDARD — within baseline EPD risk; standard pricing tier.
Risk-band thresholds (test-set quantiles):
| Band | Probability range | Treatment |
|---|---|---|
| BASE | 0.00% – 1.94% | Standard pricing |
| P90 | 1.94% – 3.51% | Tier-2 LLPA surcharge candidate |
| P95 | 3.51% – 11.22% | Tier-3 LLPA + post-funding QC re-review |
| P99 | 11.22%+ | Pre-funding decline review recommended |
Interpretation: This loan's 1.33% prediction sits comfortably below the P90 threshold (1.94%) — the model classifies it as standard EPD risk. The 95 LTV / 40 DTI combination is structurally above-average risk but the 700 FICO and Fannie-pathway adjustment keep the predicted probability within the baseline band.
Reference: Population baseline (model's true_positive_rate calibration anchor) is approximately 0.88%. This loan sits roughly 1.5× the baseline — meaningfully above average but not flagged as elevated.
Calibration: Test-set AUC 0.878 (2024 cross-cycle holdout); isotonic-calibrated. Predicted probabilities track realized 60+DQ rates closely across the test population.