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  • Clifford Rossi

Understanding the Risks of Multiple Credit Scores in Mortgage Lending




Regulators and industry have for years discussed how to prudently expand access to mortgage credit. With improved modeling and competition among third-party credit score providers, the possibility exists to support this goal. However, the industry has

ad little experience managing credit risk in an environment where multiple credit scores for a borrower from different credit score providers can be used. This possibility has significant implications for credit investors, whether GSEs, portfolio lenders, private mortgage insurance companies or CRT credit investors. The focus of this study, therefore, is to present an empirical analysis comparing three different statistically based mortgage scores leveraging Classic FICO augmented with a number of other traditional credit risk attributes for different borrower cohorts. The complete report can be found below.

Understanding the Risks of Multiple Credit Scores in Mortgage Lending
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