Credit availability tightens, but originators quickly modify policies and workflow to manage demand.
As volume increases with the summer months, Service 1st’s CEO remarks on clients' success stories in keeping up with demand.
As the mortgage industry has grappled with underwriting and score card adjustments over the past few months, originators have quickly managed and embraced the “perfect storm” of sorts that has clinched mortgage markets. According to CreditXpert, previous FICO® mid-score ranges of 580 – 620 have risen to 660 – 680 per the company’s April 2020 data. Minimum score requirements have increased as well. In April, JP Morgan Chase raised their score requirement for purchases to 700, accompanied by a required 20% down payment.
And yet, profitability is sky-high as loan spreads are their highest since 2008 – and it’s not just a refi play. Purchase apps have also increased, “to the highest level in over 11 years and for the ninth consecutive week,” according to the MBA’s Joel Kan. Kan was citing the MBA’s Weekly Mortgage Applications Survey for the week ending June 12th.
As originators process increasing application volume, they must manage the score disparity between applicants and the requirements of wholesalers and investors. With the increase in mid-score requirements, 21-28% of prospective borrowers will likely require a score improvement plan, such as the WayFinder™ solution offered by Service 1st.
With WayFinder, processors and loan officers can provide a step-by-step plan, completely customized for the applicant to raise their score to a defined level. Not to be confused with credit repair, WayFinder is comprised of defined actions the borrower must take to positively impact their score. Learn more.
Additionally, every Service 1st mortgage credit report includes Credit Assure™. Credit Assure notates next to each bureau score the potential score improvement opportunity. LOs are able to quickly consult with the borrower for better loan opportunities should they exist.
Throughout the COVID-19 crisis, the importance to verify the borrower’s exact employment and credit circumstances right up to the minute of closing has remained paramount. Service 1st clients deeply depend upon the company’s industry-leading turn times for their mortgage verifications. For three consecutive months, we have seen 76% of verification of employment/income (VOE/I) returned within 24 hours with 89% of our volume is completed within 2 days. And we consistently exceed industry benchmarks by up to 75% faster turn times with credit report tradeline updates and inquires.
For other solutions and further information on faster turn times, better service, and lower costs, visit us at SRV1st.com or call (877) 814-1178.