National Mortgage News covered the recent announcement that the Federal Home Loan Bank of San Francisco (FHLBank San Francisco) will begin accepting mortgages underwritten using VantageScore 4.0.
The story underscores that a total of 33 million people nationwide can’t establish a credit metric using traditional models, with an estimated 5.5 million of these consumers currently located in San Francisco. These individuals would be scoreable using VantageScore 4.0, which considers alternative data in addition to traditional consumer credit history. The opportunity for broadening access to the mortgage ecosystem could generate up to $1 trillion in originations, as estimated by a recent VantageScore study.
Teresa Bryce Bazemore, President and CEO of the FHLBank San Francisco, told National Mortgage News, “This was significant in terms of trying to move forward on having more people have the ability to borrow.” She added, “It brings to fruition an effort that’s been in the works since it became clear a couple of years ago that the score held the potential to expand home lending.”
Tony Hutchinson, SVP of Industry and Government Relations at VantageScore told National Mortgage News, “We think this is going to be the impetus for a lot of people that have been on the fence,” referring to lenders who may be considering adopting VantageScore. “One of the things that we think many lenders or mortgage originators should do, especially if they don’t want to put a whole lot of money into it upfront, is to test this on a small portfolio so they can get some practical knowledge without having to really go full bore into it,” Tony added.
Patelco Credit Union, a member organization of the FHLBank San Francisco, also lent support to the bank and VantageScore’s joint announcement. “We look forward to adding VantageScore 4.0 for mortgages in the future,” said Richard Wada, the organization’s Chief Lending Officer.
Read the full story here: Federal Home Loan Bank of San Francisco adds Vantagescore