FICO welcomes new mortgage clients to its 10T scoring model

Utilization
of
FICO’s
10T
credit
score
model
is
gaining
additional
momentum
in
2024,
with
two
different
lenders
signing
on
to
use
it
for
various
purposes
before
broader
mandated
adoption
arrives
next
year. 

Ohio-based
national
direct
lender
Liberty
Home
Mortgage
is
the
latest
company
opting
for
the
FICO
10T
model,
announcing
it
would
start
employing
it
for
nonconforming
originations.
Liberty
joins
several
other
companies
already
using
10T
for
nonconforming
loans,
including
Movement
Mortgage
and
Crosscountry.
In
the
first
quarter
of
this
year,


Primis
Bank,
Premier
Lending
and
Cardinal
Financial,
likewise,
all
agreed
to
begin
use
of
FICO
10T
for
certain
types
of
originations.

Introduced
in
2020,
the
FICO
model
was
selected
along
with
Vantagescore
4.0
by
the
Federal
Housing
Finance
Agency


as
one
of
two
score
models
lenders
will
eventually
need
to
consider
when
underwriting
to
make
them
eligible
for
sale
to
government-sponsored
enterprises.
The
use
of
two
new
models
will
replace
the
FICO
Classic
score,
which
has
been
a
requirement
for
two
decades.

Full
implementation
of
the
FHFA
plan
is
expected
to
occur
by
the
end
of
2025,
although


some
elements
of
the
proposal
are
likely
to
come
sooner. 

Rather
than
wait
for
mandated
changes
to
arrive,
a
small
number
of
lenders
began
working
with
the
10T
model
as
recently
as
last
year
for
nonconforming
loans
sold
to
private
investors.
In
February,


Cardinal
Financial
said
it
would
begin
looking
at
10T
scores
specifically
for
Department
of
Veterans
Affairs
originations,
which
are
also
not
sold
to
Fannie
Mae
or
Freddie
Mac
and
don’t
have
a
specific
requirement
for
this
type
of
credit
metric
like
they
do.
Cardinal
was
the
first
to
announce
it
would
use
the
model
for
VA
loans.

FICO
claims
the
predictive
analysis
offered
through
10T
can
increase
originations
by
as
much
as
5%,
while
reducing
default
risk
by
up
to
17%.

The
addition
of
Liberty
Home
Mortgage
to
the
list
of
FICO
10T
users
comes
a
week
after
Planet
Home
Lending
also
said
it
would
incorporate
the
model
in
its
recapture
analysis
of
its
servicing
portfolio,
which
contains
government-backed
and
conventional
mortgages
from
its
distributed
retail
channel
or
correspondent
division. 

“We’re
eager
to
tap
the
power
of
FICO
Score
10T
to
further
analyze
our
book
of
business
and
unlock
new
origination
opportunities,”
said
John
Bosley,
Planet
Home
Lending
mortgage
president,
in
a
press
release.  

Planet
Home’s
use
of
10T
also
points
to
the
growing
consideration
of
new
scores
in
broader
contexts
within
the
mortgage
industry.
In
February,
the
Federal
Home
Loan
Bank
of
San
Francisco
indicated


it
would
begin
accepting
mortgage
collateral
from
lenders
using
Vantagescore
4.0.

With
the
most
recent
additions,
FICO
10-T
is
now
in
use
in
some
aspects
of
the
business
at
mortgage
companies
with
a
combined
cumulative
origination
volume
of
more
than
$100
billion,
the
data
analytics
software
provider
said.
Those
same
companies
service
nearly
$300
billion
in
mortgages.