Cardinal Financial Completes Issue of First Ever Mortgage-Backed Security Containing Loans Decisioned with the help of FICO Score 10 T
Cardinal Financial achieved a milestone by issuing the first-ever mortgage-backed security (MBS) with loans decisioned using FICO Score 10 T. This pool, traded on November 25, includes VA loans assessed with FICO's newest credit score model, which incorporates trended data for better predictive power. The adoption of FICO Score 10 T enabled more favorable loan terms for military and active-duty borrowers without increasing credit risk. FICO collaborated with the U.S. Veterans Administration to confirm the score's acceptance ahead of the Federal Housing Finance Agency's transition requirements. Over 21 mortgage lenders have adopted FICO Score 10 T for non-GSE loans, enhancing credit risk transparency and expanding homeownership opportunities.
Cardinal Financial ha raggiunto un traguardo emettendo il primo titolo garantito da mutui (MBS) mai realizzato, utilizzando il punteggio di credito FICO Score 10 T. Questo pool, negoziato il 25 novembre, include mutui VA valutati con il nuovo modello di punteggio di credito di FICO, che integra dati di tendenza per una maggiore capacità predittiva. L'adozione del FICO Score 10 T ha consentito condizioni di prestito più vantaggiose per i militari e i prestatori in servizio attivo, senza aumentare il rischio di credito. FICO ha collaborato con l'Amministrazione per i Veterani degli Stati Uniti per confermare l'accettazione del punteggio prima dei requisiti di transizione dell'Agenzia Federale per la Finanza Abitativa. Più di 21 istituti di credito ipotecario hanno adottato il FICO Score 10 T per mutui non GSE, migliorando la trasparenza del rischio di credito ed espandendo le opportunità di possesso di abitazioni.
Cardinal Financial alcanzó un hito al emitir el primer título respaldado por hipotecas (MBS) utilizando el puntaje de crédito FICO Score 10 T. Este conjunto, comercializado el 25 de noviembre, incluye préstamos VA evaluados con el nuevo modelo de puntaje de crédito de FICO, que incorpora datos de tendencias para una mejor capacidad predictiva. La adopción de FICO Score 10 T permitió términos de préstamo más favorables para los militares y prestatarios en servicio activo sin aumentar el riesgo de crédito. FICO colaboró con la Administración de Veteranos de EE. UU. para confirmar la aceptación del puntaje antes de los requisitos de transición de la Agencia Federal de Financiación de la Vivienda. Más de 21 prestamistas hipotecarios han adoptado FICO Score 10 T para préstamos no GSE, mejorando la transparencia del riesgo crediticio y ampliando las oportunidades de propiedad de vivienda.
카디날 금융은 FICO 스코어 10 T를 사용하여 대출이 결정된 최초의 모기지 담보 증권(MBS)을 발행함으로써 이정표를 세웠습니다. 11월 25일 거래된 이 풀에는 FICO의 최신 신용 점수 모델로 평가된 VA 대출이 포함되어 있으며, 보다 나은 예측력을 위해 추세 데이터를 통합합니다. FICO 스코어 10 T의 채택은 군인 및 현역 대출자에게 더 유리한 대출 조건을 가능하게 했으며, 신용 위험을 증가시키지 않았습니다. FICO는 연방 주택 금융국의 전환 요구 사항 이전에 점수의 수용을 확인하기 위해 미국 재향 군인청과 협력했습니다. 21개 이상의 모기지 대출 기관이 비 GSE 대출에 대해 FICO 스코어 10 T를 채택하여 신용 위험 투명성을 높이고 주택 소유 기회를 확장했습니다.
Cardinal Financial a atteint un jalon en émettant le tout premier titre adossé à des hypothèques (MBS) avec des prêts évalués en utilisant le FICO Score 10 T. Ce pool, négocié le 25 novembre, comprend des prêts VA évalués avec le nouveau modèle de score de crédit de FICO, qui intègre des données de tendance pour une meilleure capacité prédictive. L'adoption du FICO Score 10 T a permis d'offrir des conditions de prêts plus favorables pour les militaires et les emprunteurs en service actif, sans augmenter le risque de crédit. FICO a collaboré avec l'administration des anciens combattants des États-Unis pour confirmer l'acceptation du score avant les exigences de transition de la Federal Housing Finance Agency. Plus de 21 prêteurs hypothécaires ont adopté le FICO Score 10 T pour les prêts non GSE, améliorant la transparence du risque de crédit et élargissant les opportunités de propriété immobilière.
Cardinal Financial hat einen Meilenstein erreicht, indem es das erste jemals emittierte hypothekenbesicherte Wertpapier (MBS) mit Krediten, die mit FICO Score 10 T entschieden wurden, herausgegeben hat. Dieser Pool, der am 25. November gehandelt wurde, umfasst VA-Darlehen, die mit FICOs neuestem Kreditbewertungsmodell bewertet wurden, das trendbasierte Daten für eine bessere prognostische Leistung integriert. Die Einführung von FICO Score 10 T ermöglichte günstigere Darlehensbedingungen für Militärs und aktive Kreditnehmer, ohne das Kreditrisiko zu erhöhen. FICO arbeitete mit der US-Veteranenverwaltung zusammen, um die Akzeptanz des Scores vor den Übergangsanforderungen der Federal Housing Finance Agency zu bestätigen. Über 21 Hypothekengeber haben FICO Score 10 T für nicht-GSE-Darlehen übernommen, wodurch die Transparenz des Kreditrisikos verbessert und die Eigenheimchancen erweitert wurden.
- Cardinal Financial issued the first-ever MBS with loans decisioned using FICO Score 10 T.
- FICO Score 10 T enabled more favorable loan terms for military and active-duty borrowers.
- No observable increase in credit risk despite offering better loan terms.
- More than 21 mortgage lenders have adopted FICO Score 10 T for non-GSE loans.
- None.
Insights
The launch of the first MBS containing FICO Score 10 T-decisioned loans marks a significant evolution in mortgage lending. This innovation brings two key advantages: enhanced risk assessment through trended credit data and improved access to favorable loan terms for borrowers. The successful trading of this VA loan pool demonstrates market acceptance and could accelerate adoption of FICO Score 10 T across the mortgage industry.
The involvement of 21 mortgage lenders adopting FICO Score 10 T for non-GSE loans indicates strong market momentum. Cardinal Financial's report of higher credit scores for most borrowers without increased credit risk suggests potential for broader market impact, particularly in the
FICO Score 10 T represents a technological leap in credit risk assessment. The incorporation of trended data provides a more nuanced view of consumer credit behavior, moving beyond traditional point-in-time analysis. This enhanced predictive power is particularly significant for the VA loan segment, where borrower profiles may be more complex due to military service-related factors.
The successful securitization validates the model's reliability and could accelerate the transition from older FICO versions. The reported improvement in borrower scores without increased risk suggests the new model is better at identifying creditworthy borrowers who may have been underserved by previous scoring methods.
Mortgage securitization proves FICO Score 10 T’s ability to improve loan options for borrowers and provide better predictive power for lenders
HIGHLIGHTS:
- Cardinal Financial (Cardinal) originated its first VA loans decisioned with the help of FICO® Score 10 T following early adoption of FICO’s newest and most predictive credit score.
- Cardinal formed and traded the first government-issued mortgage-backed security (MBS) pool featuring loans powered by FICO® Score 10 T on November 25.
- The first MBS pool featuring FICO® Score 10 T loans was traded to a primary dealer.
- FICO® Score 10 T helped enable Cardinal to extend more favorable loan terms for military and active-duty borrowers whose loans are held in this pool.
FICO® Score 10 T incorporates trended data to provide lenders with a more comprehensive understanding of credit behavior over time, enabling more accurate risk assessments while expanding opportunities for borrowers, including veterans and active-duty military personnel. FICO collaborated with the
Cardinal was one of the first lenders to adopt FICO Score 10 T for its non-G3SE loans and began utilizing this more predictive credit scoring model to originate VA loans in October 2024. With the use of FICO Score 10 T, Cardinal reports that the majority of borrowers received higher credit scores, allowing more favorable loan terms to be offered with no observable increase in credit risk to the lender.
Cardinal’s pool was traded to a primary dealer on November 25. The issuance is not only expected to enhance liquidity for future loans decisioned with the help of FICO® Score 10 T, but also further expand the use of FICO’s newest credit score within the secondary market.
“Today’s announcement underscores Cardinal’s role as a leader in rethinking how we measure and manage credit risk,” said Michael Gaines, senior vice president of Capital Markets at Cardinal Financial. “By leveraging FICO Score 10 T, we’re not only improving credit risk transparency for investors but also expanding homeownership opportunities for veteran and military borrowers.”
More than 21 mortgage lenders nationwide have proactively adopted FICO® Score 10 T for non-GSE loans. FICO is committed to assisting mortgage industry participants looking to transition to its most predictive scoring model. The FICO Score Migration Resource Center provides a detailed guide to support organizations through their score transition with key planning steps, activities, and implementation best practices.
“We are thrilled to see FICO Score 10 T at the heart of this milestone security,” said Joe Zeibert, vice president of Mortgage and Capital Markets at FICO. “By helping to enable smarter, more precise lending decisions, FICO is driving innovation that supports both financial institutions and the communities they serve. We encourage mortgage investors to consider the advantages of incorporating FICO Score 10 T into their models.”
About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 U.S. and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 80 countries do everything from protecting four billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by
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About Cardinal Financial
Cardinal Financial is a dynamic, forward-thinking mortgage organization committed to designing an exceptional experience and tailored home financing solutions for borrowers. Licensed to sell directly through Fannie Mae, Freddie Mac, and Ginnie Mae, the firm operates in all 50 states, offering a wide range of lending options to help more people achieve homeownership. Cardinal Financial's innovative approach is powered by Octane®, their custom-built loan origination platform, designed to streamline the lending process from start to finish. Visit CardinalFinancial.com for more information.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241203319479/en/
Julie Huang
press@fico.com
Source: FICO
FAQ
What milestone did Cardinal Financial achieve with FICO Score 10 T?
When did Cardinal Financial trade the first MBS pool featuring FICO Score 10 T loans?
How does FICO Score 10 T benefit military and active-duty borrowers?
How many mortgage lenders have adopted FICO Score 10 T for non-GSE loans?
