Credit union mortgage servicers may eventually be able to use a new FICO tool aimed at identifying homeowners with good credit but at risk of walking away from their mortgages.
Andrew Jennings, chief analytics officer at FICO and head of FICO Labs, said the firm has already been introducing the product to the largest national mortgage servicing firms.
Jennings today shed some light on the research FICO has done in the area. He said identifying the amount of time a borrower had been in an home and whether or not the borrower had recently taken out more credit lines are examples of the sorts of behavioral trends the firm has tried to identify.
“There appears to be a correlation between people who might have only been at an address for a couple of years and their willingness to walk away [from the mortgage],” Jennings said, adding that people who are looking seriously at walking away from a mortgage often take steps to increase their supply of available credit before they do it.
FICO is rolling the new product out to servicers first because servicers are its natural target market, he explained. “This is a product for after the loan is booked,” Jennings said, “not as much as part of the underwriting process.”
Consumers at risk for walking away from mortgage commitments have been harder to identify since, as a whole, they usually have FICO scores that are higher than average.