CoreLogic® Releases Third Quarter 2012 Multifamily Applicant Risk Index Report

CoreLogic® Releases Third Quarter 2012 Multifamily Applicant Risk Index Report

—Third Quarter 2012 Index Up One Point Year Over Year; Report Now Includes
Renter Trends—

PR Newswire

IRVINE, Calif., Nov. 15, 2012

IRVINE, Calif., Nov. 15, 2012 /PRNewswire/ -- CoreLogic (NYSE: CLGX), a
leading provider of information, analytics and business services, today
announced that CoreLogic SafeRent^®, the nation's leading suite of screening
and risk management services designed for the multifamily housing industry,
released its third quarter 2012 multifamily applicant risk (MAR) index report
including new renter trends. The third quarter MAR Index value decreased two
points from the second quarter 2012 and increased two points from a year ago,
indicating a modest increase in national renter credit quality and applicant
pool quality.

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Published quarterly, the MAR index provides property owners and managers with
a benchmark of market based trends against which to evaluate their applicant
credit quality trends. It provides trends of national and regional renter
traffic credit quality scores whereby a lower index value indicates an
applicant pool with a higher risk of not fulfilling lease obligations.

The third quarter 2012 MAR Index was equivalent for one- and two-bedroom units
at 106 (see Graph 1).

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Renter Trends (based on an analysis of 39,000 properties representing nearly 6
million apartment homes)

  o Rent Affordability Continues to Improve: Applicant income increased in
    excess of 1 percent from the third quarter of 2011, while the share of
    household income used to pay rent decreased in the third quarter by
    approximately 1.5 percent year over year to approximately 22 percent of
    total household income. The number of transactions with multiple
    applicants increased and the number of transactions with only one
    applicant declined, particularly in class A and B properties where the
    decline was in excess of 3 percent. "Lower rent-to-income ratios suggest
    that applicants can afford higher rents in many markets," said Jay Harris,
    senior director of Business Development for CoreLogic SafeRent. "The
    decreased number of single applicants indicates that renters are
    continuing to share the cost of rent with roommates, family and others in
    shared-living situations."
  o More Applicants Age 50+: Compared to a year ago, applicants age 51 to 64
    and 65+ comprised a slightly larger share of all applicants across
    property class (A, B and C classes are categorized by design and
    functionality, the year of construction and the building's location) –
    ranging from 16 to 19 percent of applicants. The share of younger
    applicants, ranging in age from 18 to 24, declined both from the second
    quarter and year over year.
  o Thin or No Credit File Applicants Increase: Applicants with thin (3 or
    fewer trade lines on credit bureau file) or no credit bureau files
    represented 29.2 percent of third-quarter renter applicants—the highest
    share of renter applicants since 2007, but only slightly higher than the
    second quarter figure of 28.9 percent of applicants. "Individuals without
    conventional credit histories are important component of the market and
    make up an increasing share of all rental applicants," said Harris.
  o Operators Are Declining Fewer Applicants: The proportion of applicants
    declined by users of tenant scoring during the third-quarter has dropped
    steadily, with the lowest number of declined applicants in the third
    quarter of 2012. This is part of a larger trend of fewer declined
    applications that has occurred since 2008. The multifamily operator
    determines the minimum score required to qualify at each property, or the
    score at which an applicant will be declined. This resident credit quality
    score increased slightly for all property classes during the third
    quarter, year on year. "The apartment industry continues to decline fewer
    applicants and the renter credit quality of those applicants has improved
    both in score and income," said Harris.

Regional Multifamily Applicant Risk Index Data
Regionally, the South reflected the lowest MAR Index value—103, although this
is a four point increase year over year. The Northeast continues to maintain
the highest MAR Index with a value of 113 (see Table 1).

Table 1: Regional Multifamily Applicant Risk Index Data 
                          Change from           Change from
Region    Q3 2012 Q2 2012 Q2 2012 to Q3 Q3 2011 Q3 2011 to Q3
                          2012                  2012
Midwest   103     106     -3            101     2
Northeast 113     116     -3            114     -1
South     103     105     -2            99      4
West      111     112     -1            108     3
U.S.      106     109     -3            104     2

The three Metropolitan Statistical Areas (MSA) with the greatest decreases in
the MAR Index year-over-year were Rochester, N.Y. (4-point decline);
Philadelphia-Camden-Wilmington, Pa.-N.J.- Del.- Md. (1-point decline); and
Boston-Cambridge-Quincy, Mass – N.H. (1-point decline).The MSAs with the
greatest increases in the MAR Index year-over-year were
Denver-Aurora-Broomfield, Colo. (4-point increase);
Washington-Arlington-Alexandria, D.C.- Va.- Md.-W. Va. (5-point increase); and
Austin-Round Rock, Tex. (5-point increase) (see Table 2).

Table 2: Metropolitan Statistical Area & Multifamily Applicant Risk Index
Deltas
                                                                Change from Q3
MSAs With Leading Decreases                           Q3   Q3   2011
                                                      2012 2011
                                                                to Q3 2012
Rochester, N.Y.                                       99   103  -4
Philadelphia-Camden-Wilmington, Pa.-N.J.- Del. – Md.  113  114  -1
Boston-Cambridge-Quincy, Mass – N.H.                  114  115  -1
                                                                Change from Q3
MSAs With Leading Increases                           Q3   Q3   2011
                                                      2012 2011
                                                                to Q3 2012
Denver-Aurora-Broomfield, Colo.                       109  105  4
Washington-Arlington-Alexandria, D.C. – Va.-Md.-W.    115  110  5
Va.
Austin-Round Rock, Tex.                               117  112  5

 

Understanding the Multifamily Applicant Risk Index (MAR Index)
The MAR Index is published quarterly by CoreLogic SafeRent. The Index is based
exclusively on applicant traffic credit quality scores from the CoreLogic
SafeRent statistical lease screening model (Registry ScorePLUS^®). It provides
trends of national and regional traffic credit quality scores whereby a lower
index value indicates an applicant pool with a higher risk of not fulfilling
lease obligations. A MAR Index value of 100 indicates that market conditions
are equal to the national mean for the index's base period of 2004. A MAR
Index value greater than 100 indicates market conditions with reduced average
risk of default relative to the index's base period mean. A value less than
100 indicates market conditions with increased average risk of default
relative to the index's base period mean. The MAR Index is derived from the
statistical screening model from CoreLogic SafeRent, which is the multifamily
industry's only screening model that is both empirically derived and
statistically validated. The statistical screening model was developed from
historical resident lease performance data to specifically evaluate the
potential risk of a resident's future lease performance. The model generates
scores for each applicant indicating the relative risk of the applicant not
fulfilling lease obligations. A lower score indicates a more risky applicant.

To receive the MAR Index data and renter trends for your Metropolitan
Statistical Area or if you have questions, contact CoreLogic SafeRent at
marketing@saferent.com.

About CoreLogic
CoreLogic (NYSE: CLGX) is a leading residential property information,
analytics and services provider in the United States and Australia. Our
combined data from public, contributory and proprietary sources spans over 700
million records across 40 years including detailed property records, consumer
credit, tenancy, hazard risk and location information. The markets CoreLogic
serves include real estate and mortgage finance, insurance, capital markets,
transportation and government.  We deliver value to our clients through unique
data, analytics, and workflow technology, advisory and managed services.  Our
clients rely on us to help identify and manage growth opportunities, improve
performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic
operates in seven countries.  For more information, please visit
www.corelogic.com.

CORELOGIC, the CoreLogic logo, SAFERENT and REGISTRY SCOREPLUS are trademarks
of CoreLogic, Inc. and/or its subsidiaries.

SOURCE CoreLogic

Website: http://www.corelogic.com
Contact: Media; Alyson Austin, Corporate Communications, +1-714-250-6180,
newsmedia@corelogic.com, or Katherine McDonald, CoreLogic SafeRent
Communications, +1-678-229-5206, srmarketing@corelogic.com, OR Investor; Dan
Smith, Investor Relations, +1-703-610-5410, danlsmith@corelogic.com