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So far the event we’ve been considering as the subject of analysis has been default, with occasional mention of churn.

Default, being progressive, lends itself to analysis of its stages, such as the events of going 30DPD or 60DPD. In addition to default hazard, one can analyse 30DPD hazard and 60DPD hazard. One advantage, especially for monitoring, is that these events occur slightly sooner. A statistical advantage is that these events are more numerous than default events. Given an intuition, or perhaps a model, of how 30DPD and 60DPD profiles relate to default profiles, they could be a useful analytical tool.

That segues into the roll rates discussion AWML.

The relationship however need not be straightforward. For example, there may be a spike of 30DPD or 60DPD at MOB=2 or 3, due to bugs or carelessness with the administration of new re-payment schedules. Most of those would not roll through to default.

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