FICO Simulator Available on Xactus Platform; Redfin Data Shows More Cancellations, Fewer Pending Sales
Written By: Joel Palmer, Op-Ed Writer
Mortgage professionals can now access FICO’s Score Mortgage Simulator on the Xactus360 Verification Platform, the companies announced earlier this month.
FICO announced the tool in October. It’s designed to simulate potential impacts to a consumer’s FICO score with hypothetical changes in credit report data. Examples include a potential borrower reducing their credit card balance or getting rid of a collection account.
FICO has encouraged mortgage professionals to use the tool to help potential borrowers gauge how these changes could open up more loan options and favorable mortgage rates. FICO said simulations also allow mortgage professionals to see how different credit strategies may influence potential changes to the applicant’s FICO Score. Lenders can also provide actionable recommendations to borrowers to improve their credit score and loan options.
FICO said its Score Mortgage Simulator provides Dynamic Credit Scenario Planning, which enables users to simulate credit scenarios to project potential FICO Score changes, and impact on loan eligibility.
“Even a few additional points in a potential borrower’s FICO Score can have a material impact on the mortgage loan terms offered.” said Geoff Smith, vice president and general manager, Consumer Scores at FICO. “Ultimately, the FICO Score Mortgage Simulator will prove to be a powerful tool that can enable more people to achieve the dream of homeownership.”
“We are excited about being the first company to partner with FICO to introduce this important tool to the lending community,” said Shelley Leonard, President of Xactus. “Our deep industry connections and experience with score simulation tools will play a key role in the simulator’s roll out and fostering its quick adoption.”
Lenders can learn more about the FICO® Score Mortgage Simulator by visiting www.fico.com/ficoscore10T.
In other news of interest to mortgage processors and underwriters:
Redfin reported this month that pending U.S. home sales fell 6.4 percent from a year earlier during the four weeks ending March 2, the second-biggest decline since November 2023.
Redfin attributed to the sales slump to a 3.2 percent rise in the median U.S. sales price, pushing the typical homebuyer’s monthly housing payment to just $26 below its all-time high.
The company also noted that a dip in mortgage rates helped push mortgage-purchase applications up 9 percent week over week.
In another negative trend in the mortgage market, about 41,000 U.S. home-purchase agreements fell through in January, equal to 14.3 percent of homes that went under contract that month. Redfin said that’s up from 13.4 percent a year earlier and is the highest cancellation rate for this time of year since at least 2017.
It’s also a slow period for investor-purchased properties, according to Redfin. U.S. real estate investors purchased 47,004 homes in the fourth quarter of last year, the lowest level for that time of year since 2016, according to Redfin. That was down 3.9 percent from a year earlier, the biggest decline in a year.
Redfin said its agents in some parts of the country report that investors are not seeing the rate of return that they were two or three years ago. In some cases, investors even worry about having to sell at a loss.
In dollar terms, investors purchased $36.5 billion worth of homes in the fourth quarter. That was up 6.3 percent year over year, equal to the increase in home-sale prices over that period.
Investor purchases are also making up a smaller share of total home purchases than usual for the end of the year. Real estate investors purchased 17.1 percent of U.S. homes that sold in the fourth quarter, the lowest level for that time of year since 2020 and down from 19 percent a year earlier. Investors lost market share because they pumped the brakes on purchases faster than regular homebuyers.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
