For decades, FICO was the only credit scoring model that mattered in mortgage lending. Lenders built their workflows around it, mortgage insurance companies priced to it and Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs), required it.
That era is ending.
Now, GSE mandates, a more competitive scoring environment and dramatic pricing developments are forcing an operational and strategic shift that lenders can no longer afford to ignore.
The Federal Housing Finance Agency (FHFA), which oversees the GSEs, has directed them to move away from exclusive reliance on Classic FICO and adopt more advanced credit score models. In 2022, FHFA validated and approved two new models: FICO 10T and VantageScore 4.0. In Ju...
