FICO: The ‘Credit Score Monopoly’ is a Myth

first_img Tagged with: Credit Score Fannie Mae FICO Freddie Mac Mortgage Credit Access About Author: Xhevrije West in Daily Dose, Featured, News, Secondary Market Fannie Mae and Freddie Mac recently made headlines when congress members said that the GSEs had a monopoly on their credit scoring system due to their singular use of the FICO Score.The H.R. 4211 bill, also titled the “Credit Score Competition Act of 2015,” was introduced by U.S. Rep. Ed Royce (R-California) and U.S. Rep. Terri Sewell (D-Alabama)—both members of the House Financial Services Committee—to the House of Representatives.The bill would allow Fannie Mae and Freddie Mac to consider alternative credit-scoring models instead of the FICO model, which would open up homebuying options for many consumers whose credit does not meet the current standards.Together, Fannie Mae and Freddie Mac occupy 90 percent of the secondary mortgage market, the release said. The use of one credit scoring model has nearly created a monopoly in this field. Reps. Royce and Sewell suggest that additional credit scoring models would “foster competition and innovation in the credit scoring industry.”“The GSEs’ use of a single credit score is an unfair practice that stifles competition and innovation in credit scoring. Breaking up the credit score monopoly at Fannie and Freddie will also assist them in managing their credit risk and decreases the potential for another taxpayer bailout,” Rep. Royce said.These accusations bring up one important question: How does FICO feel about the situation?Joanne Gaskin, Senior Director, Scores & Analytics at FICO, sat down in an exclusive interview with DS News to reveal where the company stands in this move to introduce more credit scoring systems at Fannie Mae and Freddie Mac and enhance credit access among borrowers.Q: What is FICO’s stance on the new credit scoring model proposed in the newly introduced regulation to change the singular, FICO credit scoring model at Fannie Mae and Freddie Mac and consider more options?A: We understand the intent of the legislation that has been put forward. The interesting thing to note is the GSEs process of evaluating the competing scoring models for potential adoption is actually well underway. FICO fully supports the evaluation process that’s going on right now. We think the key is to simply allow the GSEs and the FHFA to continue to conduct their analysis without interference.In fact, the FHFA 2016 Scorecard, discusses the analysis conducted in 2015 which included the assessment of leveraging alternate or updated credit scores as appropriate. We would like to see the market adopt our latest score version: FICO Score 9.FICO Score 9 is the latest scoring model and most-predictive to-date. An important new feature of FICO Score 9 is that we have differentiated treatment for medical collections from non-medical collections, which has been discussed at great lengths in the marketplace. It is an approach to drive as much value out of the data that exists in order to make the most predictive score for origination purposes. A more predictive score tends to mean more consumers qualify for credit or qualify for better terms.Q: How does the newly introduced regulation affect the mortgage industry? Are we locking out potential buyers using only one scoring system?A: The newly -introduced legislation supports the existing process of GSEs and FHFA in the evaluation of competing credit score models.The implication that the GSEs’ use of the FICO Score is locking potential buyers out is without merit. Today, 190 Million consumers receive a FICO Score. There are an additional 28 Million consumers that have information at the three major credit bureaus but do not obtain a FICO Score for the following reasons: “inactive credit” (e.g. 3-4 years since any account was last updated), “collection-only” (i.e., this is the only information in their credit file), or they have only a single account that is “too new” (less than 6 months payment history). Scoring these individuals is not only analytically unsound but will lock many consumers into low scores effectively freezing them out of mainstream credit. It is punitive to return a low score to these consumers whose credit status is frozen in time—often as a result of a period of prior financial distress.Furthermore, returning a score for consumers who have a single tradeline less than 6 months old or have collection-only information in their credit files will not qualify them for a mortgage. Lastly, a consumer without a credit score can avail themselves of the GSEs manual underwriting process as a pathway to homeownership.Q: Is this singular model really a credit score monopoly at Fannie and Freddie? Is it fair? What about competition in the industry for other credit scorers? How do we innovate?A: There is no credit score monopoly. Lenders have always freely acquired FICO scores from the three primary credit repositories for making credit score decisions. The GSEs are conducting a comprehensive evaluation today of competing credit score models. The process is very similar to that which lenders undertake.There is no monopoly; instead there is a decision process well underway in order to make a determination what scores will be most beneficial for the GSEs to use within their business. FICO happens to be just one input to the overall automated underwriting process. In fact, the GSEs developed their own credit model to make the purchase decisions. The interesting thing is if we look outside of the mortgage space, the most widely used scoring model in the marketplace is FICO Score 8, which is not in use by the GSEs. So, the GSEs’ selection of a score does not create a monopoly.Q: If Congress does not move forward with the bill, in what ways can we increase access to credit? Is FICO doing anything to increase access to mortgage credit?A: Access to credit is an incredibly important issue. What FICO is doing now in that realm is the introduction of a new scoring model called FICO Score XD, which is intended to address the ‘credit invisible’ population or the population of about 50 million consumer who have absolutely no information at the three main credit repositories. We have gone out and looked for compliant datasets that come from both Equifax and Lexis Nexis in order to create a score that will open a pathway to credit for those that are credit invisible today. This is a much better approach than just relaxing minimum credit score criteria and using stale data at the credit repositories in order to score more consumers.FICO Score XD is in pilot mode right now with the 12 largest credit score issuers. We expect a full release for unsecured credit into next year. FICO Score XD creates a great opportunity for a consumer to gain access to credit because they have either paid a utility on time, telecom, or have other positive information outside of the credit repositories to help create this new pathway to credit. Once a consumer has acquired credit through the use of FICO Score XD for six months, they will obtain a traditional FICO score. This is a great approach for solid, sustainable access to credit. December 18, 2015 2,174 Views Previous: TRID: Focus is On Efficiency While Maintaining Compliance Next: What Will Drive the Future Growth of the SFR Market?  Print This Post Credit Score Fannie Mae FICO Freddie Mac Mortgage Credit Access 2015-12-18 Brian Honea FICO: The ‘Credit Score Monopoly’ is a Myth Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago The Best Markets For Residential Property Investors 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Related Articles The Best Markets For Residential Property Investors 2 days ago Home / Daily Dose / FICO: The ‘Credit Score Monopoly’ is a Myth Xhevrije West is a talented writer and editor based in Dallas, Texas. She has worked for a number of publications including The Syracuse New Times, Dallas Flow Magazine, and Bellwethr Magazine. She completed her Bachelors at Alcorn State University and went on to complete her Masters at Syracuse University. Share Save Sign up for DS News Daily Subscribelast_img read more

The Week Ahead: Quarterly Results for Freddie Mac

first_imgHome / Daily Dose / The Week Ahead: Quarterly Results for Freddie Mac Governmental Measures Target Expanded Access to Affordable Housing 2 days ago  Print This Post Share Save About Author: Rachel Williams Servicers Navigate the Post-Pandemic World 2 days ago Demand Propels Home Prices Upward 2 days ago Tagged with: Freddie Mac HOUSING mortgage Q2 Data Provider Black Knight to Acquire Top of Mind 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago The Best Markets For Residential Property Investors 2 days ago On October 31 Freddie Mac will report its Q3 2017 financial results via a 9 a.m. EST conference call.  The conference call will be concurrently webcast and the replay will be available on the company’s website at www.FreddieMac.com/investors for approximately 30 days.Last quarter, the GSE experienced a net income of $1.7 billion and comprehensive income of $2.0 billion. This was a decrease of  $0.5 billion and $0.2 billion, respectively, from the first quarter of 2017. The company’s quarter-over-quarter earnings were relatively stable as market-related impacts remained low.Freddie Mac’s mortgage-related investments portfolio was $283.7 billion as of June 30, 2017, a decline of $7.5 billion from March 31, 2017.As of June 30, 2017 Freddie Mac completed approximately 35,000 single-family loan workouts to help borrowers avoid foreclosure.To lean how Q3’s results will different, be sure to tune in on Tuesday.This Week’s Schedule:American Enterprise Institute’s conference call on July National Mortgage Risk Index, Monday, 11 a.m. EST”Data Security: Vulnerabilities and Opportunities for Improvement,” hearing held by the Subcommittee on Financial Institutions and Consumer Credit, Tuesday, 2 p.m. ESTMBA Mortgage Applications, Wednesday, 7 a.m. ESTFannie Mae’s Q3 2017 Financial Results, Thursday, 8 a.m. ESTFreddie Mac Weekly Mortgage Survey, Thursday, 10 a.m. EST Demand Propels Home Prices Upward 2 days ago October 29, 2017 1,078 Views center_img Freddie Mac HOUSING mortgage Q2 2017-10-29 rachelwilliams Servicers Navigate the Post-Pandemic World 2 days ago Rachel Williams attended Texas Christian University (TCU), where she graduated with Magna Cum Laude with a dual Bachelor of Arts in English and History. Williams is a member of Phi Beta Kappa, widely recognized as the nation’s most prestigious honor society. Subsequent to graduating from TCU, Williams joined the Five Star Institute as an editorial intern, advancing to staff writer, associate editor and is currently the editor in chief and head of corporate communications. She has over a decade of editorial experience with a primary focus on the U.S. residential mortgage industry and financial markets. Williams resides in Dallas, Texas with her husband. She can be reached at [email protected] Previous: Pending Home Sales: National Update Next: Several Cities Experience New Peaks in HPI in Daily Dose, Featured, News Related Articles The Best Markets For Residential Property Investors 2 days ago The Week Ahead: Quarterly Results for Freddie Mac Data Provider Black Knight to Acquire Top of Mind 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily Subscribelast_img read more

COVID-19 Causing Economic Hardship in California

first_imgSubscribe Demand Propels Home Prices Upward 2 days ago Previous: Two Congressional Bills Aim to Prevent Mass Evictions Next: Online Foreclosure Services Expanded Share Save in Daily Dose, Featured, News Demand Propels Home Prices Upward 2 days ago The Best Markets For Residential Property Investors 2 days ago California Renters 2020-06-30 Mike Albanese  Print This Post COVID-19 Causing Economic Hardship in California Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville. Governmental Measures Target Expanded Access to Affordable Housing 2 days ago June 30, 2020 1,042 Views center_img Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Related Articles About Author: Mike Albanese The Week Ahead: Nearing the Forbearance Exit 2 days ago Tagged with: California Renters Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Home / Daily Dose / COVID-19 Causing Economic Hardship in California The Best Markets For Residential Property Investors 2 days ago Sign up for DS News Daily Today, more than 30% of the income of over 3 million renters there go toward rent, while 1.7 million more pay more than 50%, according to a report from the Terner Center at the University of California at Berkley. Consequently, African-Americans, particularly, are being priced out of neighborhoods, cities and, in many instances, the state altogether.On top of that, COVID-19 only exacerbates matters. Most likely, 2.3 million California households will feel the brunt of the economic tailspin stemming from the pandemic. As it is, paying rent already was a nail biter for half of those households.This crisis is the byproduct of myriad factors, stated the report. For example, over the last several decades, economic and racial equality have significantly risen, while households are tumbling toward the financial bring due to a shortfall of affordable housing funding in the state and thin social safety net. As if that wasn’t plenty already, for decades, the housing shortage there has hung over the state’s head.The Bay Area alone bears a housing shortage of 700,000 units, according to a recent SPUR study. It’s culminated in sky-high rents in the in the middle of the last economic recovery, worsening already inequitable racial outcomes.One certainty: underbuilding housing no longer is affordable in the state. In the shadow of COVID-19, steps must be taken to guarantee new housing dodges the path it followed a decade ago, stated the report.According to the report, steps toward supporting new housing already are being taken by the state legislature and administration. A gaggle of new housing bills; especially those introducing fresh spending, were iced for the year due to the truncated legislative timeline and yet more budget limitations. Nevertheless, numerous key bills remain on the table. Several specifically are earmarked as a component of Senate President Pro Tem’s Toni Atkins’ housing production package.The housing might be the vector of hope in the clutches of the pandemic, according to Daniel McCue, Senior Research Associate at Harvard University’s Joint Center for Housing Studies.During the last economic recovery, although housing caused more headaches than relief, more typically, the housing industry provides muscle in the midst of an economic bounce back—a reality in virtually every recession during the past five decades, said McCue.One of the main points of difference between the housing market leading into the Great Recession and the market heading into today’s economic downturn is that the housing market prior to 2008 had a “substantial overhang of distressed and foreclosed properties,” which “needed to be absorbed before housing construction could be a driver of recovery,” McCue added.In May, a $3 billion package from the Health and Economic Recovery Omnibis Emergency Solutions ACT (HEROES Act), received the thumbs up from the House of Representatives. The HEROES Act would inject approximately $200 billion in further housing aid, according to an American Action Forum summary. Financial and legal assistance for renters and mortgage holders with a federally back3d mortgage are provided by The CARES Act.Meanwhile, to accommodate economic recovery through new homebuilding, the Terner Center report proposed a framework for evaluating no- to low-cost policy levers. This framework is viewed as a near-term guide for the next year by the Center that should be contemplated in conjunction with protection and preservation policies on top of advocacy at the federal level for renter support.At the same time, in the long run, Terner Center acknowledges that its proposal represents only starting point and that to nip the tide of the state’s housing challenges in the bud, additional comprehensive and structural changes are necessary.last_img read more

Cigarette sales in clubs and pubs could be suspended for illegal smoking on premises

first_imgNews Cigarette sales in clubs and pubs could be suspended for illegal smoking on the premises, Ballyshannon District Court was told.Lisa Finnegan, prosecuting on behalf of the HSE, said any smoking offence since July 1, 2009, could lead to a vending machine on the premises being closed for between a day and three months.Gerry McGovern, defending McEniff Holdings – who admitted allowing smoking at Paris/Fusion night club in Bundoran on October 16, 2010 – said he thought that was unusual.He said normally, vending machines are on the wall and belong to agencies or somebody else.The court heard that when a HSE inspector visited, four people were smoking in an internal area adjoining the smoking area and there were ash trays on the table.Mr McGovern said a “considerable” amount of money was spent providing an external smoking area when the ban was introduced and this was a first offence when people were sheltering from the rain.Judge Kevin Kilrane imposed a €50 fine and ordered the defendants to pay €1,038 prosecution costs. He also ordered the cigarette vending machine to be closed for one day. WhatsApp LUH system challenged by however, work to reduce risk to patients ongoing – Dr Hamilton By News Highland – September 17, 2011 Previous articleRevenue Commissioners accepted 6 settlements totalling €950,000 euro in DonegalNext articleCharolais Heifers worth thousands stolen from Letterkenny farm News Highland Guidelines for reopening of hospitality sector published WhatsApp Google+ Facebook Twitter Facebookcenter_img Pinterest RELATED ARTICLESMORE FROM AUTHOR Three factors driving Donegal housing market – Robinson Pinterest NPHET ‘positive’ on easing restrictions – Donnelly Google+ Cigarette sales in clubs and pubs could be suspended for illegal smoking on premises Calls for maternity restrictions to be lifted at LUH Twitter Almost 10,000 appointments cancelled in Saolta Hospital Group this weeklast_img read more

Council backed groups will have to account for funding expenditure

first_img Calls for maternity restrictions to be lifted at LUH LUH system challenged by however, work to reduce risk to patients ongoing – Dr Hamilton WhatsApp Twitter Almost 10,000 appointments cancelled in Saolta Hospital Group this week Twitter Three factors driving Donegal housing market – Robinson WhatsApp Letterkenny Councillor Dessie Larkin says it’s time that groups, facilities and events being funded by the council should come before the council to brief members on how that money is being spent.Cllr Larkin also says work programmes and plans should be submitted to the council before money is handed over to ensure that value for money is being achieved.The council has agreed to begin the process by asking what Cllr Larkin referred to as “the big three” – An Grianan Theatre, Regional Cultural Centre and the County Museum to make submissions.Speaking to Highland Radio at the meeting, he said ratepayers deserve to know where their money is going:[podcast]http://www.highlandradio.com/wp-content/uploads/2012/02/dessi830.mp3[/podcast] Previous articleMan due in court on Derry bomb chargesNext articleMan pleads guilty to Donegal child rape and abuse charges News Highland Google+ Google+center_img Facebook Pinterest Council backed groups will have to account for funding expenditure RELATED ARTICLESMORE FROM AUTHOR Newsx Adverts Guidelines for reopening of hospitality sector published Pinterest By News Highland – February 14, 2012 Business Matters Ep 45 – Boyd Robinson, Annette Houston & Michael Margey Facebooklast_img read more

Council executive accused of giving councillors a two fingered salute

first_img Previous articleThree time Olympian O’Rourke calls time on careerNext articleFaulkner feels a good result is not far away News Highland Pinterest WhatsApp Calls for maternity restrictions to be lifted at LUH The Council executive will be giving Councillors a ‘two fingered salute’ if the local authority takes part in the controversial Gateway Jobs Scheme.That is according to Councillor Mick Quinn whose motion calling on the council not to partake in the scheme was passed without opposition earlier this year.Despite this it is reported that the Council will be availng of the scheme.Councillor Quinn is seeing if there is an option to sanction the council’s executive, he has also hit out at Unions who do not oppose the scheme:Audio Playerhttp://www.highlandradio.com/wp-content/uploads/2014/06/mickq530SALUTE.mp300:0000:0000:00Use Up/Down Arrow keys to increase or decrease volume. Facebook Google+ News By News Highland – June 23, 2014 Council executive accused of giving councillors a two fingered salute Facebook Google+center_img RELATED ARTICLESMORE FROM AUTHOR Twitter WhatsApp LUH system challenged by however, work to reduce risk to patients ongoing – Dr Hamilton Twitter Guidelines for reopening of hospitality sector published Business Matters Ep 45 – Boyd Robinson, Annette Houston & Michael Margey Three factors driving Donegal housing market – Robinson Almost 10,000 appointments cancelled in Saolta Hospital Group this week Pinterestlast_img read more

Minister urged to give update on Buncrana Education Campus site

first_img Pinterest Dail to vote later on extending emergency Covid powers Previous articleLetterkenny councillor says gardai must tackle antisocial behaviourNext articleAudio Update – Garda Inspector renews appeal for fatal crash information admin Minister McConalogue says he is working to improve fishing quota Pinterest WhatsApp News Google+ Twitter The Education Minister is being asked to give an urgent update on the on the three school campus at Buncrana.The long awaited development would incorporate Crana College, Gaelcholáiste Chineál Eoghain and Gaelscoil Bhun Cranncha on one site.In July, it was announced that a site had been selected for the project however, this week it has been revealed that such a site has not been secured.Donegal Senator Padraig Mac Lochlainn has written to Minister Bruton requesting a response as to where the project stands.He says it must be brought a swift conclusion…………Audio Playerhttp://www.highlandradio.com/wp-content/uploads/2016/09/padcrana.mp300:0000:0000:00Use Up/Down Arrow keys to increase or decrease volume. Minister urged to give update on Buncrana Education Campus site Man arrested in Derry on suspicion of drugs and criminal property offences released center_img Dail hears questions over design, funding and operation of Mica redress scheme Google+ WhatsApp RELATED ARTICLESMORE FROM AUTHOR By admin – September 22, 2016 Facebook 70% of Cllrs nationwide threatened, harassed and intimidated over past 3 years – Report Facebook Twitter Need for issues with Mica redress scheme to be addressed raised in Seanad also last_img read more

Financial pressure on students will impact on Letterkenny – USI

first_img By News Highland – November 6, 2012 Google+ RELATED ARTICLESMORE FROM AUTHOR Pinterest Facebook WhatsApp Financial pressure on students will impact on Letterkenny – USI Need for issues with Mica redress scheme to be addressed raised in Seanad also Pinterest 70% of Cllrs nationwide threatened, harassed and intimidated over past 3 years – Report Twitter Newscenter_img Facebook Previous articleFuneral of murdered prison officer taking place today in CookstownNext articleDerry man charged with armed robbery News Highland Minister McConalogue says he is working to improve fishing quota Letterkenny’s local economy will lose almost 4 million euro over the next four years as a result of increased college fees, and cuts to the student maintenance grant.That’s according to the Union of Students in Ireland.There are currently 3,000 students attending Letterkenny IT, 2,004 of these students recieve a maintenance grant, while 996 students pay full fees.The President of the USI, Letterkenny man John Logue, says the town’s businesses will lose out……..[podcast]http://www.highlandradio.com/wp-content/uploads/2012/11/studs.mp3[/podcast] WhatsApp Google+ Dail hears questions over design, funding and operation of Mica redress scheme Twitter Man arrested in Derry on suspicion of drugs and criminal property offences released Dail to vote later on extending emergency Covid powerslast_img read more

Highland’s Farming News – Thursday 10th March

first_img Man arrested in Derry on suspicion of drugs and criminal property offences released HSE warns of ‘widespread cancellations’ of appointments next week A 15 Minute Programme presented by Chris Ashmore every Thursday at 7.05pm highlighting all that’s happening in the farming community.Audio Playerhttp://www.highlandradio.com/wp-content/uploads/2016/03/FARMING-69.mp300:0000:0000:00Use Up/Down Arrow keys to increase or decrease volume. Dail to vote later on extending emergency Covid powers Previous articleSt.Eunan’s secure Quarter Final spot in College’s Colmcille CupNext articleTyrone unchanged for trip to Meath admin Twitter Twitter Facebook Google+ Facebook Dail hears questions over design, funding and operation of Mica redress scheme RELATED ARTICLESMORE FROM AUTHORcenter_img WhatsApp Highland’s Farming News – Thursday 10th March PSNI and Gardai urged to investigate Adams’ claims he sheltered on-the-run suspect in Donegal Watch: The Nine Til Noon Show LIVE By admin – March 10, 2016 Google+ NewsPlayback Pinterest WhatsApp Pinterestlast_img read more

€23 million to be allocated to Donegal County Council for roads

first_img Dail to vote later on extending emergency Covid powers €23 million to be allocated to Donegal County Council for roads Previous articleCllr John Ryan added to Fine Gael ticket in Donegal North EastNext articleDungloe and Glenties Sewerage schemes to go to tender News Highland Pinterest €23 million is to be allocated to Donegal County Council under the regional and local road grant allocations.€23 million has been approved by way of grant allocation to Donegal County Council, Letterkenny Town Council will receive €395,000, Buncrana Town Council has been allocated €195,000 and Bundoran Town Council has been sanctioned for funding of €139,000.Local authorities will also be provided with flexibility to change their programmes if necessary given the recent period of very severe weather.Donegal South West Senator Brian O Domnhaill, said the allocation is annual, but in saying that, is still much needed:[podcast]http://www.highlandradio.com/wp-content/uploads/2011/02/bri1pm.mp3[/podcast] Google+ Twitter Facebook Newsx Adverts Dail hears questions over design, funding and operation of Mica redress scheme By News Highland – February 2, 2011 Google+center_img HSE warns of ‘widespread cancellations’ of appointments next week WhatsApp Man arrested in Derry on suspicion of drugs and criminal property offences released Pinterest PSNI and Gardai urged to investigate Adams’ claims he sheltered on-the-run suspect in Donegal Twitter Facebook RELATED ARTICLESMORE FROM AUTHOR Man arrested on suspicion of drugs and criminal property offences in Derry WhatsApplast_img read more