Fair Isaac is struggling: new Beacon mortgage score
It’s obvious that Fair Isaac is desperate. Experian terminated the resale agreement and lenders agree that FICO scores FAILED:
Lenders agree: FICO scores do NOT predict defaults
As I have documented YEARS ago, Fair Isaac is so utterly and totally incompetent, its programmers can’t even correctly analyze the Equifax credit reports:
5/4/07 - FICO scores add FICTITOUS Equifax late payments long after charge-off
So here is their latest desperate effort to stay in business:
New FICO Credit Score for Mortgage Lenders Debuts
BEACON Mortgage Score from Equifax offers unprecedented predictive power to help mortgage lenders and loan servicers make smarter mortgage decisions
March 11, 2009 (Minneapolis, Minnesota and Atlanta, Georgia) — FICO (NYSE:FIC), the leading provider of analytics and decision management technology, and Equifax (NYSE: EFX), a global leader in information solutions, today introduced BEACON® Mortgage Score, a new FICO® industry score specifically designed to help mortgage lenders make the best possible risk decisions when addressing both current homeowners and those aspiring to own. Equifax plans to make the new score available in April to mortgage lenders and servicers for use in their loan servicing decisions including mortgage loan modifications.
The new score builds upon the predictive power of today’s BEACON® credit risk score which is widely used in the mortgage industry. By focusing specifically on mortgage risk performance, FICO scientists have developed a version of the BEACON score with significantly greater power for assessing mortgage repayment risk. In early validation testing, the performance of BEACON Mortgage Score was compared to that of the general risk BEACON score when predicting mortgage repayment risk specifically. The new score identified up to 25 percent more of the high-risk mortgages and home equity lines-of-credit that later became seriously delinquent. In light of today’s housing crisis, this new score can aid servicers in earlier identification of borrowers at risk, mitigating the high cost of consumers moving to foreclosure.
In business terms, these early results suggest that the use of BEACON Mortgage Score by the industry potentially can save it $1 billion in foreclosure costs and help keep an estimated 115,000 more struggling homeowners in their homes.
“One of the goals of our alliance with Equifax is to bring both companies’ assets and expertise to bear on the uncertainty facing lenders, borrowers and investors,” said Lisa Nelson, vice president of Global Scoring Solutions for FICO. “This new score is one of the first fruits of that alliance, and it couldn’t be more timely or valuable for mortgage lenders, loan servicers and the securitization industry.”
“Everyone in the mortgage industry is working hard to manage risk more effectively, which will help address the rising foreclosure rate while allowing servicers to keep their doors open to qualified new borrowers,” said Dann Adams, president of US Consumer Information Solutions for Equifax. “The BEACON Mortgage Score is an innovative solution with unprecedented visibility that will provide greater predictive strength at a time when the industry needs it most.”
To assist clients, BEACON® Mortgage Score retains the same 300-850® scoring range, minimum scoring criteria, and inquiry treatment as previous versions of the BEACON® score. However, to achieve its significant increase in predictive strength, FICO’s new scoring model assesses several additional data variables derived from Equifax consumer credit files, selected specifically to predict mortgage repayment risk. As a result, the model includes 15 additional score reason codes that help lenders understand and explain the scores. Businesses interested in more information about BEACON® Mortgage Score are welcome to contact FICO at .
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Until we get some legislators and regulators with IQs above 60 and a conscience, I can only recommend that (near) judgment-proof readers STOP paying their unsecured debts and walk away from their over-mortgaged homes.
The economy is DOOMED as long as lenders continue to use Fair Isaac’s PROVEN TO FAIL scores.
Good people will continue to pay higher rates and become homeless just because they don’t have the MONEY or KNOWLEDGE to manipulate their artificially low FICO scores.
Vote with your money and STOP supporting the criminals.
Update: I noticed the horrible Google ad for credit scores next to this post. Obviously, those credit bureau “consumer” scores are even WORSE than FICO scores because no lender uses them.
PURE fraud.
For MANY years I refused to put ads on my sites and I apologize to all who get screwed. If you had donated, the ads wouldn’t be there. I don’t get rich of the ads. But I got tired of begging for donations and the ads pay for about half the server cost.
Posted by Christine on 03/20/2009 at 01:13 AM
2003 Suit (appealed, Experian filed credit reports on PACER) • Fair Isaac - credit scoring fraudware • (0) Comments • Permalink
