The big interview: UWM exec: VantageScore helping brokers get more loans done
By qualifying borrowers with a higher score, some of the loan level price adjustments (LLPAs) could be removed, saving the borrower a considerable amount of money.
“We’ve seen, it may even be thousands by this point, of people whose FICO score was, say, 642, and the VantageScore comes back at 708,” he said. “That’s a different LLPA, saving people thousands of dollars.”
At the time Smith described that example, lenders were required to apply a 20-point reduction to a borrower’s VantageScore before using it for pricing. Mat Ishbia, CEO of UWM, read a similar example from a broker’s email during his keynote at the same event, before that adjustment was removed entirely just days later.
“Their FICO score was 733. Fast forward a few weeks, when I registered the file, more importantly, to my surprise, the Vantage score came in at 775. You got to subtract 20 points; it’s a 755. So it’s one bucket higher,” the broker wrote, according to Ishbia. “Not only did this improve loan pricing by three-eighths, a lower LLPA, but it also saved the borrower more than $100 a month on mortgage insurance.”
With that 20-point reduction now gone, the kind of pricing improvement both executives described would be even larger for a borrower with the same scores today.
