It seems to me like only yesterday when a brand new method of determining a borrower’s creditworthiness was introduced. It was dubbed a “credit score”. It would revolutionize lending. No longer would underwriters need to sweat and labor reviewing the details of an applicant’s credit history and profile. Like Prego, it’s in there. All the necessary ingredients to determine a…
In honor of college basketball’s annual “Big Dance” held in March in which approximately 68 men’s teams compete for the NCAA Championship and ultimately boils down to the “Final Four.” It is a good time to reflect on the Four C’s of Single Family loan underwriting. They are Capacity, Credit, Cash and Collateral. Outlined below is a brief description of…
Welcome to America; land of opportunity. That includes the opportunity to defraud mortgage lenders and banks when getting a loan. (Chicago Tribune article on Liar Loans) Individuals found guilty of participating in the creation of fraudulent loans say they shouldn’t have to pay any restitution to the BofA for losses because the bank should have known better. After all, the…
With all the attention being paid to TRID compliance and changes, it seems that lenders have loosened some their credit standards in some areas to help make more loans. Maybe, this is the result of more independent mortgage bankers doing more FHA lending. Whatever it is, Equifax recently reported that loans made to consumers with an Equifax Risk Score of…
If you recall, I recently wrote about the intention of Fannie and Freddie to begin requiring a new expanded credit score model. This new model will take into account a consumer’s credit trends (historical use of credit) plus begin the utilization of heretofore non-traditional credit sources (Credit Scores). It seems the good old FICO credit score ain’t so good no…
And so it begins. Which credit score to use to provide the best profile of a potential borrower? Is it FICO, FICO Stage9 or, maybe, the new VantageScore? (Credit Scoring) For the past several years, the industry has mainly relied on the good old three digit FICO score. Some say that is no longer the most representative of a consumer’s…
