BLOG

Tight margins, fluctuating loan volume and rising operational expenses have created one of the toughest operating environments in recent memory, leading mortgage lenders to critique every dollar they spend. While interest rate challenges often dominate industry conversations, another issue is gaining momentum: lenders are taking a harder look at the value of their traditional vendor relationships.

Every lender has had the conversation. A borrower comes in motivated, financially responsible and ready to buy, yet the credit score doesn't support the loan. Not because they've managed money poorly, but because the model used to evaluate them was never designed to capture how they actually live their financial lives.

For decades, the mortgage industry operated on a simple assumption that when it came to credit scoring, there was FICO, and there was everything else. Lenders built their systems around it. The GSEs required it. Mortgage insurance companies priced to it. The model was stable, familiar and, for most of the industry, unquestioned. That assumption is changing, fast.