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fico: Home loan payment obligation losing clout - Las Vegas mortgage borrowers change priorities - 12/12/09 10:45 PM
A new twist is emerging in the ongoing real estate overload. There have been a few of them already as mortgage borrowers wrestle with all sorts of challenges that can put their home ownership in jeopardy. This probably won't be the last one, either. Times are rather unusual and fragile not only in the housing market, but also in the beat-up financial industry and the entire economy.
Historically mortgage payment has ranked as the number one priority for consumers, to be made before any other financial obligation. It assures that the roof over the head of one's family stays there, an … (14 comments)

fico: Mortgage foreclosure will affect credit score, but how much? - 10/22/09 10:19 PM
The home loan and real estate markets we are currently slogging through are unprecedented in their severity. The last time something similar happened was so long ago that few are still here to remember it. As a result millions of people are unable to make their home loan payments and subsequently will have their credit damaged. Three basic events can lead to that.
In short sale the mortgage lender agrees to let the homeowner sell the property for less than the underlying loan balance. Deed in lieu means that the borrower gives the deed, or keys, to the home loan provider … (14 comments)

fico: Fannie Mae tightens mortgage requirements a notch - 09/28/09 06:07 PM
The key home loan financier operating on the secondary mortgage market has seen much better days with its immense portfolio. Just like most other lending institutions it, too, has been slowly bleeding as foreclosures keep shaking its once solid foundation. So much so that Washington had to bail it out a while back. Yet, it's still doing what it was mandated to do, invest in mortgage paper.
Fannie Mae, to stem growing losses, is gradually hiking mortgage underwriting criteria, though. In the latest round of updates that'll go in effect November 1, the borrower's FICO has to be 620 or better … (12 comments)

fico: FICO update a tad more tolerant - 09/08/09 04:32 PM
Mortgage applicants are quite familiar with FICO, the much-used scoring model that has a lot to say about the type of a home loan and interest rate they could qualify for. Besides being widely employed in most consumer credit requests, it's nowadays also checked in many other situations, like in insurance and employment.
FICO 08 is the latest version of the model, fresh out of the oven. It is updated periodically to reflect what is going on in the credit marketplace, as it should be. Equifax, Experian and TransUnion, the big three, have already put their arms around it.
What's new … (9 comments)

fico: FICO score can take a hit following Home Affordable Modification Program - 07/17/09 07:16 PM
This outcome hasn't been discussed much before but now it's out there for everyone to see. Namely that if a homeowner in distress is successful in using the Home Affordable Modification Program, kicked off in March, to lower his mortgage payments, his FICO score is likely to take a hit. FICO is the commonly-used barometer to assess a consumer's credit standing.
That's because many mortgage lenders report the modification to FICO as such. This means that the original terms of the loan were changed, often for less than the full amount, and any time that happens FICO's existing formula regards that … (20 comments)

fico: Jumbo mortgage making a meaningful comeback - 04/01/09 04:16 PM
The current home loan landscape has been largely very unkind to those who were out to purchase a house using a jumbo vehicle or to homeowners who wanted to refinance an expensive property. In simple terms, when the loan amount goes above the Fannie Mae and Freddie Mac conforming limit it becomes a jumbo because the mandate of the above two agencies bans them from buying these high-priced loans on the secondary market. Generally the limit varies between $417,000, for areas considered general, and goes all the way up to $729,750 for high-cost regions. Las Vegas cut-off point today is $417,000.
… (9 comments)

fico: New mortgage guidelines coming into focus - 03/17/09 12:12 AM
On the heels of the latest stimulus package, or whatever it was called this time, Fannie Mae and Freddie Mac have provided the home loan industry more details about their new requirements. Some of the guidelines are actually more borrower-friendly than what was initially believed. Eligible homeowners must have a mortgage that is either held by these agencies in their portfolio or is part of a mortgage bond guaranteed by them. The crucial element is that homeowners seeking to refinance through them have to have a solid payment record, for instance no lates during the last 12 months. 
Among the more … (10 comments)

fico: Mortgage approval hinges on an acceptable appraisal more than ever - 03/14/09 06:43 PM
As if there already weren't enough roadblocks to qualify for a home loan. Most of the past mortgage programs have vanished into thin air in the aftermath of this still percolating real estate meltdown. Besides, down payment requirements have increased, FICO score standards are higher, PMI firms are pulling out of markets and so it goes.
Then there is the all-important appraisal. It's hard to get an accurate one when there are very few, if any, comparables in the immediate neighborhood to use. Homes are just not selling like they once were and this is the most reliable yardstick appraisers have … (6 comments)

fico: FICO score is becoming more consumer accessible - 01/20/09 04:42 PM
This is an improvement credit applicants can cheer about. For instance, when a house is purchased with a mortgage the borrower's credit credentials are pulled and in most cases the company providing it is Fair Isaac Corporation, the home of the well-known FICO score. It's used to get a look at the consumer's past credit history and then evaluate the future risk he may pose. Over the years it has been for most borrowers kind of a mysterious entity they hear a lot about from real estate agents and mortgage consultants but they never really got to understand what all it does. … (5 comments)

fico: Short sale can be a headache this big - 04/21/08 09:33 PM
Mortgage foreclosure is something that isn't advantageous to have glaring at you from a credit report. It has a large negative impact on FICO's computations and can make future credit very costly to obtain, if it's available at all. Before a distressed homeowner resorts to that route, another option has increasingly made its way into the realm of possible solutions.
A short sale. Under this arrangement the homeowner sells the house for less than the mortgage balance, with the lender's full blessing. At first sight it seems to be the ideal way to go. The borrower, or homeowner, is clear of … (14 comments)

fico: Mortgage walkaways face unkind future - 04/20/08 10:42 PM
The tough real estate market gripping large sections of the country has incubated multiple trends and one of the more noteworthy of them is the mortgage walkaway. This is where a distressed homeowner or an out-of-luck investor decides to cease loan payments and at some point later on hands in the house keys to the lender. Many of them believe that the action will just like that solve their mortgage payment problems and they will be able to start anew somewhere else. 
It's not that easy, however. Fannie Mae, the mammoth buyer of mortgages on the secondary market, issued new guidelines to … (2 comments)

fico: FICO 08 credit scoring model still unavailable - 11/08/07 10:29 PM
The mortgage industry could really use the new and improved FICO scoring system, but it unfortunately continues to be under development and there currently is no firm time frame when it's going to be ready. Back in June FICO announced that it would go live this fall first at Experian, one of the big three credit bureaus. The other two, Equifax and TransUnion, would receive it sometime next year. However, all everyone can do now is wait.
The most anticipated feature in the FICO 08 will be the elimination of the now famous Internet credit score improvement scam. The way the scam … (4 comments)

fico: Your FICO score may get a lift - 08/06/07 07:29 PM
Wouldn't that be nice? When you apply for, say, a mortgage loan to refinance, instead of having a FICO score of 690, you could jump all of a sudden to 725. That difference would help lower the interest rate you get and subsequently the long-term borrowing costs. And you don't have to do anything to earn it.
Now, this is the deal. It can only happen to Capital One credit card holders. And here is why. This major credit provider will begin reporting its cardholders' credit limits to the big three national credit agencies. Those who have Capital One cards probably … (0 comments)

fico: FICO score repair under critical scrutiny - 07/09/07 11:46 PM
As was reported here a few weeks ago, FICO will upgrade the software model of its credit scoring system in the fall to better keep fraudulent activity at bay. What they want to do is stop the practice of piggybacking.
Piggybacking involves firms mostly operating on the Internet that offer to pay people with excellent credit card records to let others with poor credit backgrounds to be added to their accounts. When that takes place, the good credit information pulls the bad credit record up and enables that person to qualify for, let's say, a home mortgage. The maneuver can improve credit scores in … (4 comments)

fico: FICO to purge scoring scam - 06/21/07 11:22 PM
If your FICO score comes in too low you can go online and look up a specialty company there that will help you boost it by up to 300 points. Go from, say, 500 to 750 in a matter of weeks. That improvement will make a large difference when you apply for a mortgage, not only putting you in a position to get a home loan in the first place, but also making you eligible for a lower rate and possibly fewer fees. How is that doable, you might ask?
Here's how it works. These specialty Internet companies recruit credit card holders with excellent payment backgrounds to … (8 comments)

fico: Mortgage lending practices under scrutiny - 06/14/07 06:50 PM
 
The Federal Reserve Board, or what many just call the Fed, has the rule-making authority under HOEPA, Home Ownership and Equity Protection Act, to look into and amend national mortgage lending practices. It's a big responsibility and now it is conducting hearings on how to adjust some of the current procedures that led to the subprime mess. It has invited members from all interest groups to attend the meetings in Washington and offer their views on how to proceed.
The hearings are focusing on four main areas. One of them is the borrower's ability to repay the mortgage. I don't know what … (11 comments)

fico: Investing in real estate - 06/12/07 09:20 PM
 
All sorts of people were getting into rental real estate four-five years ago, at least here in Las Vegas. That was when the market was on a rocket ride up. It was of minor concern to many that their knowledge base on the overall market was rather slim. Now they are paying for it because they failed to do their homework. How to secure an investor mortgage, what does it take to be a landlord, where to purchase the house or condo, how the market can shift? These are some of the questions that should be answered more than casually before getting seriously involved. … (0 comments)

fico: FICO formula upgrades - 05/22/07 04:11 PM
 
FICO tweaks its secret credit-rating formulas every so often and now they have another one coming up in September. Many of us think that FICO only helps out in the residential real estate business, mortgages that is, but their score carries a lot of weight in other areas, too. Banks offering car loans rely on it, landlords and credit card companies pull one to look at, employers generally check it before making hiring decisions and insurance firms assess risk based on it. It has become a key indicator on someone's financial background.
The changes that the company will introduce later this year involve … (2 comments)

fico: FICO primer VII - 05/17/07 03:06 PM
This is the seventh part on how FICO works. To be able to fully follow the flow of discussion it would be to your benefit to first read FICO primers I, II, III, IV, V and VI. This is the last segment of the FICO tutorial. Long journey, wasn't it.
If you're denied credit, the Equal Credit Opportunity Act, or ECOA, mandates that you can within 30 days get the reasons why. You can also ask for a free credit report from the credit reporting agencies within 60 days.
As mentioned before, it's important to check your credit report annually for any errors. Better yet, check it … (0 comments)

fico: FICO primer VI - 05/15/07 04:56 PM
This is the sixth part on how FICO works. To be able to fully follow the flow of discussion it would be to your benefit to first read FICO primers I, II, III, IV and V. This is the next to last in the series, so there's hope.
It's now time to go to the fourth category, which is new credit. This one is about 10% of your score. We today tend to shop for more credit than ever before and FICO is monitoring that. In general, more new credit will lower your score. According to past financial studies, someone opening multiple credit accounts … (0 comments)