6 mortgage information developments to look at in 2023
Another announcement from the MBA Annual, this time from Federal Housing Finance Agency Director Sandra Thompson, finally moved the industry to a more up-to-date FICO model, as well as called for the use of VantageScore.
Furthermore, mortgage lenders will now be allowed to pull data from two of the three bureaus rather than all of them, Thompson announced at the same time.
Then in November, FICO unveiled a controversial tiered pricing plan. A small group of 46 heavy users will get an inflation-related increase of less than 10%. The six lenders in the second tier will get a 200% boost, while everyone else gets a 400% increase.
FICO’s argument is that until now it had been charging approximately 60 cents per credit score across the board and even the largest boost would not be significant for lenders.
“With this royalty increase, FICO will now collect approximately 60 cents to approximately $2.75 per FICO Score,” the FICO statement said. “That means FICO will collect approximately $2-to-$8 total for all three scores out of a $40 to $50 (or more) tri-merge report and score bundle, and out of an average $3,800 in closing costs.”
But the lending community is concerned about preferential treatment along with increased costs to borrowers.
How these changes will impact mortgage lending in 2023 will bear watching.
(Read stories here and here.)