Comparison of predictive models for the mortgage behaviours assessment system of default and prepayment

Abstract

This paper has debated between fractional and two part models in the context of default and prepayment behaviour, applications where a large proportion of zero observations are typically found. The predictive capacity in this paper is to provider the direction of consideration and very good fit result to the behaviours of default and prepayment for bank. From the perspective of practitioners, it could point of view the characteristics of borrowers of each variable would seem to be choosing in this paper. This paper also provides the simply looking at the extent to which policy decision of bank conclusions would differ depending upon the characteristics of customers' behaviour consideration. © 2011 Springer-Verlag Berlin Heidelberg.