Mortgage lenders weigh AI, alternative data and credit models

Mortgage lenders have been hurtling toward a new credit scoring regime centered on FICO 10T, VantageScore 4.0 and a broader array of borrower data. But even as they push to modernize, digitally transform and become more efficient, they’re grappling with how far to go with it.That question served as the axis of tension during a Credit Super Session on Tuesday at the Mortgage Industry Standards Maintenance Organization (MISMO)’s Fall Summit, where executives from FICO, VantageScore, Experian, Equifax and TransUnion teamed up on an hour-long discussion moderated by HousingWire CEO Clayton Collins.Collins kicked off the conversation with three questions: Can we use more data? May we? And should we? Where consensus gets complicated The first question is increasingly settled, panelists concurred. FICO 10T and VantageScore 4.0 have been approved for use in the mortgage market, and both incorporate trended credit information that gives lenders a longer view of consumer behavior than the point-in-time snapshot associated with Classic FICO. The other queries proved more complex and harder to reach consensus on: Should lenders use more data, and if so, how? Panelists broadly agreed that more ...