The mortgage industry has seen a shift in trends and an emergence of new advances in models used to determine loan approval. The newest model proposed by FICO offers a potential increase of up to 5% in mortgage approval rates.
This scoring model offers a combination of data including alternate data and could prove to be a major advantage to lenders when trying to make the best decisions possible. Adding in the factor of alternate data can provide a more complete picture of a prospective borrower and all the information that comes with it, including their payment history and financial behavior. In addition, lenders are more likely to benefit from a better understanding of these customers and their capability of repaying their loans which could lead to increased profits and stabilized portfolios.
Important Elements:
• Newer scoring model proposed by FICO
• Increase of up to 5% in mortgage approval
• Combines data including alternate data
• Offers lenders a complete picture of prospective borrower
• Better understanding of customers and their capability of repaying loans
• Could lead to increased profits and stabilized portfolios
You can read this full article at: https://www.housingwire.com/articles/movement-mortgage-adopts-fico-10-t-credit-scoring-model-for-non-conforming-loans/(subscription required)
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