PRESS RELEASE
Credit Schemes Emerge from MortgageDaily.com
DALLAS — (June 18, 2007) Two controversial services promise consumers the ability to piggyback off the credit of others, according to recent coverage at https://www.mortgagedaily.com — the dominant source of online news for the mortgage industry.
A concept being promoted by an Iowa company matches credit-challenged home seekers with investors who have good credit and then, through a processing company, handles the new purchasers’ payments.
Because the mortgages are in, and remain in, the investors’ names, the approach avoids criticism when the credit-challenged person’s credit is directly improved by appearing as the authorized user on the credit cards of people with very good credit.
Spokespeople at Freddie Mac and Fannie Mae told MortgageDaily.com it is unlikely that either company would purchase the investors’ mortgages.
After MortgageDaily.com inquired with the Federal Trade Commission about the procedure, a spokesman said he requested that the agency’s counsel look into this approach. (https://www.mortgagedaily.com/CreditSharing060507.asp)
The FICO credit score is going through some revisions.
Fair Isaac Corp. will increase the number of consumer behavior types, each with a different score card, that will be more precise in predicting risk, a spokesman told MortgageDaily.com.
Instead of dividing consumers into 10 behavioral groups, they now will be divided into 12 groups on the basis of the latest updating and refinement of the FICO scoring system. As before, the credit score model will determine which of the groups a consumer fits into and then use that group’s score card to calculate his or her FICO score. (https://www.mortgagedaily.com/CreditScoreUpdate052107.asp)
A new type of credit repair service that sells credit card histories to credit applicants — boosting their score in the process — has prompted Fair Isaac to make further alterations to the FICO score.
Dubbed Piggyback Credit, the scheme takes advantage of authorized user account information which helps a family member who is managing credit for the first time.
The change enables the newest FICO model to ignore authorized user accounts, Fair Isaac said. (https://www.mortgagedaily.com/CreditPiggyback060507.asp)
Read complete credit news at https://www.mortgagedaily.com/Credit.asp
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Founded in 1998, MortgageDaily.com is the dominant online news source for the mortgage industry. Around one million mortgage business news pages are viewed monthly at MortgageDaily.com and its affiliate publications.
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Source:Â MortgageDaily.com
