RiskSpan releases credit risk model built for non-QM loans

RiskSpan has launched a new credit risk model designed for the expanding nonqualified mortgage (non-QM) market, adding to its existing prepayment modeling tools as investors seek more specialized analytics for the asset class.

The company announced Friday the general availability of Credit Model 7.1, a model built specifically for non-QM loans and delivered through the RiskSpan Platform. The release allows users to analyze loan data and generate cash-flow projections within a single platform, according to the company.

The launch comes as the non-QM securitization market has expanded rapidly in recent years. Morningstar DBRS reported that non-QM residential mortgage-backed securities (RMBS) issuance nearly doubled year over year in the third quarter of 2025 — rising 97% to a record $20.9 billion, compared to $10.6 billion in Q3 2024.

Fitch Ratings has said issuance across its rated non-QM and non-prime RMBS portfolio increased more than 800% between 2020 and 2023, while KBRA projects broader nonagency RMBS issuance, which includes non-QM loans, will grow another 15% in 2026 to $160 billion.

RiskSpan said Credit Model 7.1 is designed to better reflect the characteristics of non-QM loans by modeling borrower behavior across different documentation types, including bank statement, debt-service-coverage ratio (DSCR), full documentation and other loan categories.

According to the company, the model incorporates 10 loan- and borrower-level variables — including credit scores, mark-to-market loan-to-value ratios, debt-to-income ratios and loan purposes — along with three macroeconomic factors. It was trained using approximately $87 billion in unpaid principal balance across roughly 226,000 non-QM loans originated between January 2018 and August 2025.

The release also includes artificial intelligence-powered loan tape analysis tools and application programming interface (API) access for customers integrating the model into their own systems. RiskSpan said a backtesting dashboard is planned for a future release.

RiskSpan said the model is available immediately to clients using its Platform and Loans Module, with additional integrations and deployment options planned in future updates.

This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.