The key to implementing non-QM products

With the refi boom falling off and the margin compression happening to lenders nationwide, lenders are looking at non-QM to help fill in those gaps. Learn how to implement non-QM products here!

RealTrends 2021 Team Profitability Study

Brokerage firms have often speculated about how well teams perform from a profit and loss point of view, as well as how productive they are. In this research study, RealTrends answers these two big questions.

Proven Strategies for Accelerating eMortgage Adoption with Freddie Mac and Better

This webinar will cover how the industry is working to overcome challenges lenders experience in adopting eClosings. You’ll hear from industry leaders at Snapdocs, Freddie Mac and Better Mortgage. Register now!

Logan Mohtashami on existing home sales, mortgage rates

Today’s HousingWire Daily begins the Rundown miniseries where HousingWire’s Editor-in-Chief Sarah Wheeler and Lead Analyst Logan Mohtashami will talking about housing and economics every Monday.

Politics & MoneyMortgageReal Estate

Average FICO score stands at record high

Time is erasing the scars of the Great Recession, FICO says

The average FICO score stands at 706, a record high, said Ethan Dornhelm, vice president of scores and predictive analytics at FICO. That compares with 686 at the 2009 end of the Great Recession and it eclipses the 690 at the 2006 height of the housing bubble.

The key drivers are U.S. economic expansion that has propelled job growth and an increase in consumer education about protecting and improving scores, Dornhelm said in a blog post. In addition, the passage of time is helping to remove the credit scars from events that happened during the financial crisis, he said.

“Consumers who suffered financial misfortune during the Great Recession have over the past few years had the associated missed payments from that time period purged from their credit file, in accordance with the Fair Credit Reporting Act,” he said.

Measuring different credit events, the biggest improvement between April 2009 and April 2019 was the timeliness of mortgage payments, Dornhelm said. A decade ago, 7.2% of the population had been 90 days or more late on a mortgage payment within the last two years. By April, it had dropped to 2.8%.

Also showing big improvement was the percentage of the population who had been 90 days or more past due on a credit card in the last two years. A decade ago, it was 13%, and in April it was 8.6%.

The jump in FICO scores was due to “score improvement, not score inflation,” Dornhelm said.

“Significant improvement in the overall population’s credit profile has been the key driver of the 20-point increase in national average FICO score over the past decade,” he said. “These improvements are reflective of improving consumer financial health, as would be expected during a period of economic expansion.”

Economic data signaling the chance of a looming recession has increased uncertainty in the credit-scoring realm, he said. 

“The average FICO score will continue to change, but in what direction?” Dornhelm said. “Trade talks with China, the possibility of a `no-deal Brexit,’ and Fed interest rate decisions loom large as concerns of a recession persist.” FICO score chart 2019

(Image courtesy of FICO)

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please