The Transition Matrix is a powerful tool that allows users to see how loans move across Loan Statuses for a period. This can be useful in understanding roll rates across different delinquency statuses, identifying loans that cure after previously missing payments, and examining loans that move into terminal statuses, amongst other analyses.


How to Read the Transition Matrix:

For users who may not be familiar with leveraging a tool similar to dv01’s Transition Matrix to analyze rolls, here are some high-level guidelines:

  • Rows reflect loans that were in the status in the row names of the table at the beginning of the period
  • Columns reflect loans that were in the status in the column headers of the table at the end of the period
  • The values in each cell represent the percentage / balance / count of loans that moved from the status at the beginning of the period (i.e.; the row name) to the status at the end of the period (i.e.; the column header):
  • The row totals reflect the balance / count associated with the corresponding row names at the beginning of the period:
  • The column totals reflect the balance / count associated with the corresponding column header at the end of the period, based off the same value at the beginning of the period.  As a result, the sum of all column totals will be the same as the row totals:
  • NOTE: The Transition Matrix only includes loans that were outstanding at the beginning of the period


How to Customize the Transition Matrix:

dv01’s Transition Matrix offers flexibility to users in a number of different ways:

  • Time Display enables toggling between the Calendar and Loan Age views:
    • Calendar view allows for users to see how loans move between calendar months
    • Loan Age view allows for users to dive deeper into trends that occur at specific points in a given loan’s life by normalizing for months on book
  • Period toggles between one and three-month periods
  • As Of Month option (available only when selecting the Calendar view) to select the calendar month record to be used as the ending period
  • Loan Age option (available only when selecting the Loan Age view) to select the month on book record to be used as the ending period
  • View Data As toggles between values being shown as a percentage, notional balance outstanding, or a count of loans