Previous In this conversation with HousingWire’s Allison LaForgia, mortgage industry leaders Andrew Davidson, Jennifer McGuinness-Lubbert, Greg Sher, Robert Zimmer and Shelley Leonard discussed what could finally accelerate credit modernization and why the next 12 to 24 months may prove pivotal for the mortgage industry.
Greg Sher, Managing Director at NFM Lending, began by highlighting transparency and access to information. “I think the 10T — we need the data,” Sher said. “We’ve got to be able to see that to know where the real benchmarks are to have the full picture.”
Robert Zimmer, Principal at TVDC, pointed to industry pressure and advocacy as the next major forces behind modernization efforts. “We are going to have CHLA working this issue so hard,” Zimmer said, “and if the aggregators don’t start allowing us to sell Advantage Score, we’ll be calling them quite a bit.”
Shelley Leonard, President at Xactus, asserted that the conversation cannot stay rooted in today’s operating environment and said the industry still is not fully accounting for how artificial intelligence could reshape credit evaluation altogether.
“I always have to lean into the technology,” Leonard said. “I think that we are making all of these decisions based on how our industry operates today, and no one’s considering the future of what AI could do, and how that could really cause true disruption in this space related to credit data and scores.”
Jennifer McGuinness-Lubbert, CEO at Pivot Financial, agreed AI could become transformational but cautioned against moving too quickly without proper safeguards.
“Yes, it can help immensely, but we also have some risks that we got to insulate while we’re using it,” she said. “I think AI and a vast array of models can help a lot, but they also have to be reined in to not create additional problems and disruption — not in a good way.”
McGuinness-Lubbert also returned to the broader issue of data transparency and industry adoption timelines. “I agree with Greg on release the FICO 10T data,” she said. “Let the market do the analysis. It’s time. It’s been going on, to your point, since 2022 when these were approved.”
She added that lender and counterparty adoption decisions will ultimately determine the pace of change. “I think that’s really important,” McGuinness-Lubbert said. “And lifecycle counterparties — who’s going to approve it, who’s not — I think is going to be the game changer of what happens in the next 12 months.”
Andrew Davidson, President at Andrew Davidson & Co, said the competitive environment is already intensifying, particularly as questions about cost and performance continue to grow. “One is the competitive dynamics between the various parties, which is heating up very rapidly now,” Davidson said. “Which actually may address some of the cost concerns in the long term.”
But Davidson argued the real test for modernized credit models will come during the next major market downturn. “What really will accelerate it is if we go through some sort of down cycle in the economy, where having accurate credit information is really important,” he said. “And one method outperforms or doesn’t outperform.”
He added that market conditions often determine how urgently the industry prioritizes credit accuracy. “Or if we go through another refi cycle, in which case no one cares about this,” Davidson said.
Zimmer responded with a familiar Warren Buffett analogy. “When the tide goes out, you find out who’s swimming around without a bathing suit.”
Sher agreed, warning that future market stress could quickly expose weaknesses in current systems. “There are many people that feel like we could be heading into a recession and house prices could collapse,” Sher said. “I mean, I’m not saying this is going to happen, but there are people out there that feel like that is very — look, we’re going to hit that part of this cycle eventually.”
“And then,” Sher continued, “the accuracy of data will never be more important than in that moment.”
McGuinness-Lubbert closed by emphasizing that broader economic conditions will continue shaping the conversation around modernization. “Market fundamentals really matter,” she said, pointing to geopolitical and economic uncertainty. “What happens with the latest and greatest ceasefire and what those impacts are going to be as well.”
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