Application of logistic regression analysis of home mortgage loan prepayment and defult risk

[[abstract]]"This study analyzes the mortgage loans of five Taiwanese commerce banks to identify the key factors that influence prepayments and defaults. Using data from a total of 16,213 data entries of mortgage loans of five Taiwanese commerce banks in 2002 through 2007, this study first conducts Logistic regression to analyze the behavior of prepayments and default. As far the overall predictability is concerned, this paper finds that the logistic regression model is able to provide simplified results in the measurement of model variables concerning defaults and prepayments.