Special offer

NEW "FICO 8" Mortgage Score now used for Mortgage Loan Borrowers

By
Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

The latest credit scoring product, the FICO® 8 Mortgage Score, is now available from all three major U.S. credit reporting agencies.

The FICO® 8 Mortgage Score was built specifically to help mortgage lenders better predict mortgage performance and improve credit decisions for both current and prospective homeowners. The score analyzes the full credit history on file to deliver significantly sharper assessment of mortgage repayment risk, and aids servicers in earlier identification of borrowers at risk so they can mitigate the incidence and high cost of foreclosure.

Why did the Credit Reporting Agencies add this new product?

"To do the best job of evaluating risk and increasing profits, lenders need updated credit scoring analytics that incorporate mortgage credit performance since the subprime mortgage meltdown," said Craig Focardi, senior research director at TowerGroup. "The availability of mortgage credit scores across all three credit reporting agencies will enable lenders to upgrade their loan underwriting and account management practices."

What exactly is the FICO 8?

The FICO® 8 Mortgage Score retains the same 300-850® scoring range, minimum scoring criteria, authorized user and inquiry treatment as the general-risk FICO® 8 Score.  To achieve its significant increase in predictive strength, FICO Mortgage Score assesses several additional data variables from consumer credit files to specifically predict mortgage repayment risk.  Accordingly, FICO Mortgage Score includes additional score reason codes compliant with the Fair Credit Reporting Act that help lenders understand and explain the scores to applicants.

More info here:

http://www.fico.com/en/Company/News/Pages/10-26-2010.aspx

Regina P. Brown
CA Real Estate Broker #00983670

 

Posted by

Regina P. Brown
Broker, Realtor®, M.B.A., e-Pro, GREEN
California DRE # 00983670
www.CalCoastCountry.com

                

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Comments (3)

Nicole Needham
Needham Realty - Winters, CA
SFR (530) 302-5478

Sure seems like the mortgage market was in a lot better shape pre "FICO" back in the day when the lender would examine the credit report allow the borrower to explain any late payments and then make a common sense decision. maybe its time to turn the clock back and get back to this?

Oct 28, 2010 03:13 PM
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Thanks for this additional information;  we have to stay on top of so many changes these days.

Oct 31, 2010 03:42 PM
Regina P. Brown
MBA Broker Consultants - Carlsbad, CA
M.B.A., Broker, Instructor

Nicole, it seems like it's more computer-dependent and less personal, doesn't it!

Nov 03, 2010 03:49 PM