Can a lender use regular FICO score (not Mortgage score)?

[pt2005]

I met this potential lender and he said they are using regular FICO scores (the mid score to be exact). I asked him about the Mortgage FICO scores and he said "those are too new for us. We just use the regular scores".

Question is: is he potentially lying? Or is it possible that some lenders can use whatever scores they want?

Reason I'm asking is my regular FICO scores are in the 720+, while my Mortgage FICO scores are in the 690s.

This is Movement Mortgage lender if you wonder what it is.

Thanks

[Glenn_S]

Walk away. This person does not know the business if he doesn't understand which scores his company uses.

[StartingOver10]

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@pt2005 wrote:

I met this potential lender and he said they are using regular FICO scores (the mid score to be exact). I asked him about the Mortgage FICO scores and he said "those are too new for us. We just use the regular scores".

Question is: is he potentially lying? Or is it possible that some lenders can use whatever scores they want?

Reason I'm asking is my regular FICO scores are in the 720+, while my Mortgage FICO scores are in the 690s.

This is Movement Mortgage lender if you wonder what it is.

Thanks

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Agree with the pp - run away.

The website for this co is brand new (2015). The LO you spoke with clearly has no understanding of FICO scores.  I would say that these two things together are huge red flags. Do not apply with these people.. Find a LO with another company that knows what they are talking about...

[Revelate]

Think we're discussing semantics; I won't argue the walk or run away or not point but to simply state:

Mortgage enhanced industry option scores are NOT being used anywhere.  There are actually scores developed by FICO specifically for mortgage lending much like we have the auto-enhanced industry option commonly used in auto lending today; however, the GSE's never switched off their current standard to them.   There's a non-trivial amount of confusion about mortgage enhanced vs. "scores used for mortgage" by even people who actually work in the industry, so I don't read much into the comment frankly.

"Regular" FICO scores are generally inferred to be the baseline/classic scores of which the typical FICO 04/98 mix used for mortgage qualification do fall into.  Our read of FICO 8 vs. "Scores commonly used in mortgage" doesn't jive with the rest of humanity in my experience.

Even our own forum members often don't know the difference, non-trivial number of people screamed in the past when "myFICO scores don't match the ones my mortgage lender pulled!" and we still see that a little bit today though thank goodness FICO improved their products on it after many complaints from new users all the way to moderators on the forum.

[pt2005]

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@Revelate wrote:

Think we're discussing semantics; I won't argue the walk or run away or not point but to simply state:

Mortgage enhanced industry option scores are NOT being used anywhere.  There are actually scores developed by FICO specifically for mortgage lending much like we have the auto-enhanced industry option commonly used in auto lending today; however, the GSE's never switched off their current standard to them.   There's a non-trivial amount of confusion about mortgage enhanced vs. "scores used for mortgage" by even people who actually work in the industry, so I don't read much into the comment frankly.

"Regular" FICO scores are generally inferred to be the baseline/classic scores of which the typical FICO 04/98 mix used for mortgage qualification do fall into.  Our read of FICO 8 vs. "Scores commonly used in mortgage" doesn't jive with the rest of humanity in my experience.

Even our own forum members often don't know the difference, non-trivial number of people screamed in the past when "myFICO scores don't match the ones my mortgage lender pulled!" and we still see that a little bit today though thank goodness FICO improved their products on it after many complaints from new users all the way to moderators on the forum.

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Thanks Revelate. Can you please say it in plain English? :-)

I really like this potential lender. I did some research on the lender and it seems they are legit. I want to know if it is LEGAL for lenders to use regular baseline FICO score. If it is (in fact we wish that's the case for this lender) then I have a good chance of qualifying for the 740+ bracket. My regular FICO scores now are in 740+ range but the Mortgage ones are in 690ish.

Appreciate other comments so far too.

[Revelate]

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@pt2005 wrote:

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@Revelate wrote:

Think we're discussing semantics; I won't argue the walk or run away or not point but to simply state:

Mortgage enhanced industry option scores are NOT being used anywhere.  There are actually scores developed by FICO specifically for mortgage lending much like we have the auto-enhanced industry option commonly used in auto lending today; however, the GSE's never switched off their current standard to them.   There's a non-trivial amount of confusion about mortgage enhanced vs. "scores used for mortgage" by even people who actually work in the industry, so I don't read much into the comment frankly.

"Regular" FICO scores are generally inferred to be the baseline/classic scores of which the typical FICO 04/98 mix used for mortgage qualification do fall into.  Our read of FICO 8 vs. "Scores commonly used in mortgage" doesn't jive with the rest of humanity in my experience.

Even our own forum members often don't know the difference, non-trivial number of people screamed in the past when "myFICO scores don't match the ones my mortgage lender pulled!" and we still see that a little bit today though thank goodness FICO improved their products on it after many complaints from new users all the way to moderators on the forum.

---

Thanks Revelate. Can you please say it in plain English? :-)

I really like this potential lender. I did some research on the lender and it seems they are legit. I want to know if it is LEGAL for lenders to use regular baseline FICO score. If it is (in fact we wish that's the case for this lender) then I have a good chance of qualifying for the 740+ bracket. My regular FICO scores now are in 740+ range but the Mortgage ones are in 690ish.

Appreciate other comments so far too.

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Sorry about that; in layman's terms the mortgage world is dominated by two very large organizations, Fannie and Freddie Mae who effectively dictate conventional mortgage standards in the United States, and pretty much every other mortgage product is done the same way when it comes to FICO scores used.

Basically if they use some other set of scores, a mortgage loan can't be sold to Fannie/Freddie, and as such nobody is doing anything different on conventional, and it's pretty darned unlikely even in the Jumbo space they'd be doing something different.  FHA scores are identical to conventional underwriting in 100% of the instances I'm aware of... it would undoubtedly throw off the secondary mortgage market pricing for a lender using a different set of algorithms which would impact their bottom line and probably negatively for a while unless the entire industry moves and only Fannie/Freddie can accomplish that.

Anyway this is the set of scores they will be using in 99.99% (or more, seriously it approaches 100%) of the cases currently:

http://ficoforums.myfico.com/t5/Mortgage-Loans/FICO-scores-used-for-mortgage-and-where-to-obtain-the...

[StartingOver10]

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@Revelate wrote:

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@pt2005 wrote:

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@Revelate wrote:

Think we're discussing semantics; I won't argue the walk or run away or not point but to simply state:

Mortgage enhanced industry option scores are NOT being used anywhere.  There are actually scores developed by FICO specifically for mortgage lending much like we have the auto-enhanced industry option commonly used in auto lending today; however, the GSE's never switched off their current standard to them.   There's a non-trivial amount of confusion about mortgage enhanced vs. "scores used for mortgage" by even people who actually work in the industry, so I don't read much into the comment frankly.

"Regular" FICO scores are generally inferred to be the baseline/classic scores of which the typical FICO 04/98 mix used for mortgage qualification do fall into.  Our read of FICO 8 vs. "Scores commonly used in mortgage" doesn't jive with the rest of humanity in my experience.

Even our own forum members often don't know the difference, non-trivial number of people screamed in the past when "myFICO scores don't match the ones my mortgage lender pulled!" and we still see that a little bit today though thank goodness FICO improved their products on it after many complaints from new users all the way to moderators on the forum.

---

Thanks Revelate. Can you please say it in plain English? :-)

I really like this potential lender. I did some research on the lender and it seems they are legit. I want to know if it is LEGAL for lenders to use regular baseline FICO score. If it is (in fact we wish that's the case for this lender) then I have a good chance of qualifying for the 740+ bracket. My regular FICO scores now are in 740+ range but the Mortgage ones are in 690ish.

Appreciate other comments so far too.

---

Sorry about that; in layman's terms the mortgage world is dominated by two very large organizations, Fannie and Freddie Mae who effectively dictate conventional mortgage standards in the United States, and pretty much every other mortgage product is done the same way when it comes to FICO scores used.

Basically if they use some other set of scores, a mortgage loan can't be sold to Fannie/Freddie, and as such nobody is doing anything different on conventional, and it's pretty darned unlikely even in the Jumbo space they'd be doing something different.  FHA scores are identical to conventional underwriting in 100% of the instances I'm aware of... it would undoubtedly throw off the secondary mortgage market pricing for a lender using a different set of algorithms which would impact their bottom line and probably negatively for a while unless the entire industry moves and only Fannie/Freddie can accomplish that.

Anyway this is the set of scores they will be using in 99.99% (or more, seriously it approaches 100%) of the cases currently:

http://ficoforums.myfico.com/t5/Mortgage-Loans/FICO-scores-used-for-mortgage-and-where-to-obtain-the...

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Well said Revelate.  Lets just put it out there in very plain English:  the mortgage scores are the industry standard because that is the basis for selling the loans to Fannie and Freddie. HUD uses the same scores (VA/FHA) so all are on the same 'scale'.  If the scale is different for a given lender, then that lender is not selling their loans. Not likely.  Even if they portfolio their loans awhile, they will package the loan for eventual sale.

Now, as to my comment above.  It is stressful enough for a first time homebuyer obtaining a mortgage without having to work with a loan officer that is not knowledgeable nor  experienced.  There are tons of people in the mortgage business that have the knowledge and expertise to originate loans. Why go to someone that doesn't even care enough about his own career to do in depth research/study/education in his own field?  There is no excuse for any loan officer to not know about FICO products and scoring formulas IMO.

I admit: my expectation of mortgage lenders is high. And it may seem that it is okay to give a noob a break (new LO). That's fine. But build in extra time in your deal. Make sure there is oversight by someone that is familiar with mortgages and can explain it properly to the new borrower. The borrower needs to know upfront that the deal may experience delays and other issues due to the inexperienced LO handling it. If he knows and agrees, then appropriate time frames can be constructed in the contract to allow for those delays. But the borrower needs to know up front.

It is possible that the LO thinks the borrower was referencing classic FICO 04 scores because it is the industry standard.  But it is up to the professional to make sure he makes himself clear with his borrower. The borrower is not expected to know industry jargon.

Ok, off soap box.