Using FICO Score 10 T Can Expand Mortgage Approval Rates by up to 5% When Compared to Versions Used Today
FICO, a leading analytics software firm, announced that Movement Mortgage, a top 10 retail mortgage lender, has become an early adopter of FICO® Score 10 T to analyze their non-conforming loans, in conjunction with the classic FICO® Scores. As a first-in-market user of FICO Score 10 T, Movement Mortgage and FICO will work together to share early use insights for non-conforming products to help the mortgage industry understand the benefits of the most predictive credit score in the space. Movement Mortgage’s use of FICO Score 10 T will provide opportunities to evaluate risk more efficiently in credit decisioning, as well as by the investor community.
In 2020, FICO released FICO® Score 10 T, giving lenders unparalleled flexibility and predictive power to make more precise lending decisions by incorporating trended credit bureau data. As the first mover in the space, Movement Mortgage will be able to qualify more consumers for mortgages in the future, while offering investors better insights on portfolio performance. Based on FICO analysis:
- FICO® Score 10 T can expand mortgage approval rates by up to 5% relative to versions most commonly in use today, without adding incremental risk.
- FICO estimates delinquency rates could be reduced for mortgage originations by up to 17% at a cutoff of 680 as compared to prior FICO® Scores.
“Movement Mortgage is proud to be one of the first mortgage lenders to adopt the newest credit model, as part of our mission to empower more future customers,” said Jason Stenger, Chief Operations Officer at Movement Mortgage. “We are looking forward to implementing FICO Score 10 T for non-conforming loans and are eager to work with FICO to help more consumers qualify for mortgages, while highlighting the advanced credit risk capabilities of the new scoring model to the entire lending ecosystem.”
The improvements in the predictive power of FICO® Score 10 T can help lenders safely avoid unexpected credit risk and better control default rates, while making more competitive credit offers to more consumers. And this all occurs without sacrificing the trusted FICO® Score minimum scoring criteria and user experience. A more predictive score will help more accurately project cash flows, potentially increasing the value of securitized assets on the secondary market. Movement Mortgage is excited to partner with FICO to work with the investor community on adopting this new standard.
“Movement Mortgage’s adoption of our new credit score model is an industry leading first step to showcasing the comparisons between classic FICO Scores and FICO Score 10 T for optimizing mortgage originations,” said Jim Wehmann, Executive Vice President for Scores at FICO. “We are excited to partner with Movement Mortgage on this forward-thinking adoption of FICO’s most predictive scoring model, which ultimately helps expand mortgage access to more consumers.”
FICO is committed to assisting mortgage industry participants looking to transition to our most current model, FICO® Score 10 T, with their migration strategy and planning. FICO has launched a resource center to assist national lenders, mortgage servicers, community banks and credit unions, available at the following link: FICO® Score Migration Resource Center | FICO. Our resource center provides a detailed guide designed to support organizations through their transition, key planning steps and activities, in addition to sharing implementation best practices.
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 215 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in nearly 120 countries do everything from protecting 2.6 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 countries, improving risk management, credit access and transparency. Learn more at www.fico.com.
Learn more at http://www.fico.com.
For FICO news and media resources, visit www.fico.com/news.
FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.
ABOUT MOVEMENT MORTGAGE
Movement exists to love and value people by leading a Movement of Change in its industry, corporate cultures and communities. A national top 10 retail mortgage lender, Movement funded more than $20 billion in residential mortgages in 2022. Movement is best known for its innovative mortgage process and referable experience, which begins with upfront underwriting and a seven-day loan processing goal. The company employs over 4,500 people, has more than 550 branches in the U.S. and is licensed in 50 states. After funding its balance sheet and investing in future growth, Movement's profits are used to support the Movement Foundation. To date, the Movement Foundation has received more than $370 million of Movement’s profits to invest in schools, communities and global outreach. For more information, visit www.movement.com.
As the first mover in the FICO® Score 10 T space, Movement Mortgage will be able to qualify more consumers for mortgages in the future while also providing investors with better insights into portfolio performance.