More than 70 mortgage originators are or will be using FICO 10T, nearly three months after the government-sponsored enterprises began allowing loans sold to them to be scored using this model.
May and June were the strongest months of lender enrollment to date, FICO said.
"We're at an inflection point in mortgage credit decisioning," said Julie May, vice president and general manager of B2B scores at FICO, in a press release. "More than 70 lenders have now recognized that the most predictive credit score on the market is also accessible at no additional cost, and that combination is driving a notable shift in how the industry evaluates credit risk."
In April, Fannie Mae and Freddie Mac began
The Department of Veteran Affairs mortgage guarantee program
The FICO Score 10T Free Access Program provides participating lenders with results from this model alongside the Classic FICO score which had been industry standard for many years, at no additional fee.
Among the lenders who have signed up to use 10T are:
- Fairway Home Mortgage
- InterLinc Mortgage Services
- Lower Mortgage
- NFM Lending
- Novus Home Mortgage
- Plaza Home Mortgage
- Village Capital & Investment
At the start of July, the
The historical data was expected to help lenders to better gauge their applications and encourage further use of not just 10T, but also the competing VantageScore 4.0. The GSEs previously released a historic dataset for VantageScore, and this was updated to include two more years of data alongside the publication of the FICO information.
MISMO updates guidance for private mortgage insurance
The Mortgage Industry Standards Maintenance Organization has updated its Mortgage Insurance Implementation Guide to incorporate the data requirements for lenders and private mortgage insurers to exchange data using VantageScore 4.0 and FICO 10T.
It includes being able to obtain MI rate quotes, commitments, contract underwriting, document delivery and querying for order responses.
These changes to the guide are designed to streamline how information is exchanged across systems, as well as support greater consistency in data delivery and help organizations to modernize their mortgage insurance processes.
"Standardizing how lenders and mortgage insurers exchange information is critical to improving efficiency across the mortgage ecosystem," said Brian Vieaux, president of MISMO, in a press release. The updates "also helps lenders benefit from improved system integration and more efficient loan qualification, while giving mortgage insurers access to more complete and consistent data."
VantageScore releases newer version of its model
On July 8, VantageScore Solutions released version 5.0 of its credit scoring model.
Just because a new model has been introduced, it doesn't mean the conforming or government mortgage markets will rush to adopt it, if at all.
For example,
VantageScore 5.0, the company claims, will provide an additional 9% "predictive lift" for unsecured loans such as credit cards, retail cards and personal loans, as well as for auto loans, versus the 3.0 model. It is optimized for these products, the company added.
It also is supposedly the only model trained on post-pandemic consumer loan data, unlike FICO Classic and 10T, VantageScore Solutions said.
"The credit landscape has evolved rapidly," Andrada Pacheco, executive vice president and chief data scientist, said in the press release. "VantageScore 5.0 is at the forefront of a new generation of VantageScore credit scoring models built on today's challenges and tomorrow's opportunities, providing lenders and fintechs with more granular, data-driven borrower insights, enhanced predictive power and stronger risk segmentation."
