How GSE credit score shake-up impacts mortgage insurance

Even if conforming mortgage lenders were ready to adopt VantageScore 4.0 tomorrow, several industry players warn that infrastructure and policy alignment are still lacking — and that the road to implementation could be longer and bumpier than it seems.

For example, they need to be certain the private mortgage insurers are capable of providing coverage for loans that use both this metric and eventually FICO 10T as well.

Statements from the Mortgage Bankers Association and the Structured Finance Association, among others, indicate that while the industry is supportive of Federal Housing Finance Agency Director Bill Pulte’s call for Fannie Mae and Freddie Mac to begin using Vantagescore immediately, they remain concerned that switching to either model from Classic FICO has “a number of…