Rocket Mortgage and its third-party originations unit Rocket Pro have begun utilizing the VantageScore 4.0 model, a company statement said.
It will be doing this alongside the Classic FICO model, which has been in vogue since automated underwriting was introduced by the government-sponsored enterprises.
This is now live in both channels at Rocket. VantageScore 4.0 has been incorporated into its existing processes. Rocket fit this model into its client-facing and mortgage broker-facing experiences, company representatives said.
Previously, Rocket, Pennymac and NewRez were
United Wholesale Mortgage also said it will take VantageScore for conventional loans with a maximum loan-to-value of 80%, with a haircut of 20 points.
"Rocket is giving more people than ever a fair shot at homeownership by leveraging diversified credit scoring," said Heather Lovier, chief operating officer, in a statement. "Our evolving economy requires a more modern approach to evaluating credit, and VantageScore 4.0 uses an updated methodology designed to create a more inclusive view of creditworthiness."
At the recent Mortgage Bankers Association Secondary and Capital Markets Conference in New York,
During the panel, Rikard Bandebo, executive vice president, chief strategy officer and chief economist at VantageScore, pointed out that even though both use a similar number format, the two actually have different scales which results in a different risk measurement. Both models use the 300 to 850 range.
"A 710 in one score does not have the same likely default as the other score, so that's going to be really important when people are using the scores, they understand how to translate," Bandebo said. "It's not quite like Celsius from Fahrenheit, but it's a good analogy."
