CoreLogic and FICO jointly introduced a high-performance consumer credit-risk score that is expected to improve lending decision quality and increase the number of mortgage loans lenders make.

The new FICO Mortgage Score Powered by CoreLogic evaluates traditional credit data from the national credit data repositories plus unique supplemental consumer-credit data contained in the CoreLogic CoreScore credit report—like property-transaction data, landlord/tenant data, borrower-specific public data, and other alternative-credit data. The result: “a more comprehensive and accurate view of a consumer’s credit-risk profile for loan prequalification and origination.”

According to a recent FICO quarterly survey of bank-risk professionals, conducted by the Professional Risk Managers’ International Association, bankers continue to lack confidence in the housing-finance marketplace. Approximately 75% of respondents expect the level of mortgage delinquencies to increase or stay the same over the six-month period following the survey, and more than 85% hold the same view for home-equity line delinquencies.

“In this complicated operating environment, lenders are increasingly turning to new data sources to help better interpret a consumer’s credit risk, so that more loans can be approved while mitigating potential losses,” says Tim Grace, senior vice-president of product management at CoreLogic. “For a top-20 lender processing 300,000 applications a year, adopting this new score could translate into 3,900 more loans approved every year, along with a net financial benefit of $14.5 million. As such, it not only provides a more complete and predictive evaluation of a consumer’s credit-risk profile, but it can empower lenders to better mitigate risk and approve more loans for more consumers.”

The new FICO Mortgage Score Powered by CoreLogic maintains a consistent score range, set of reason codes, and odds-to-score relationship with prior FICO Score versions, making it easy for lenders to integrate and for consumers to understand. Additionally, the CoreScore Solution maintains backward compatibility, making it readily available within existing CoreLogic Credco Instant Merge integrations.

 

 
[This article was posted on July 23, 2012, on the website of ABA Banking Journal, www.ababj.com.]    

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