Paramount Residential Mortgage Group, Inc. (PRMG) Is Latest Adopter of FICO Score 10 T

Rhea-AI Summary

FICO, a leading analytics software firm, has announced that Paramount Residential Mortgage Group (PRMG), a modern multi-channel mortgage lender, has adopted FICO® Score 10 T. This newest and most predictive scoring model will enhance PRMG’s lending technology and borrower experience. FICO Score 10 T aims to increase mortgage loan approvals and reduce delinquencies. It can boost mortgage originations by up to 5% and decrease default risk by up to 17%. The adoption supports PRMG’s growing non-qualified mortgage channel and aligns with their commitment to innovative lending technology. FICO also offers a Migration Resource Center to assist organizations in transitioning to FICO® Score 10 T.

Positive

• PRMG adopted FICO® Score 10 T, the most innovative and predictive scoring model.
• FICO Score 10 T can increase mortgage originations by up to 5% without added credit risk.
• The new scoring model reduces default risk and losses by up to 17%.
• Enhances PRMG’s lending technology and borrower experience.
• Supports PRMG's growing non-qualified mortgage and non-conforming channel.
• FICO offers a Migration Resource Center for smooth transition.

Negative

• The implementation of a new scoring model may require significant investment in new technology and training.
• Potential risks associated with transitioning to a new credit scoring system.

Insights

Financial Analyst

PRMG's adoption of FICO® Score 10 T could streamline mortgage approval processes and reduce delinquency rates. This move can potentially lead to a 5% increase in mortgage originations without increasing credit risk, which is significant given the highly competitive mortgage market. For investors, this can imply reduced risk and more predictable cash flows.

The transition to the new FICO scoring model could also reduce default risk by 17%. This is particularly noteworthy as it directly impacts loan portfolio stability and can improve the lender's overall credit profile. By adopting FICO® Score 10 T, PRMG is positioning itself as a tech-forward lender, enhancing its attractiveness to both investors and customers.

Market Research Analyst

From a market perspective, the adoption of FICO® Score 10 T by PRMG indicates a trend towards more precise risk assessment tools in the mortgage industry. This shift can be seen as part of a broader move towards leveraging advanced analytics to improve lending decisions. For investors, this translates to better risk management and potentially higher returns due to more efficient and accurate credit scoring.

The enhanced predictive power of FICO® Score 10 T can help PRMG attract a wider variety of investors and aggregators. This could lead to increased liquidity and better pricing for mortgage-backed securities. Understanding these dynamics can offer valuable insights into the evolving landscape of mortgage lending and its implications for investment strategies.

PRMG Will Use FICO’s Most Predictive and Innovative Score to Enhance Its Lending Technology and Borrower Experience

BOZEMAN, Mont.--(BUSINESS WIRE)-- FICO, a leading analytics software firm, has announced that Paramount Residential Mortgage Group, Inc. (PRMG), a modern multi-channel mortgage lender, has adopted FICO^® Score 10 T, the company’s newest, most innovative and most predictive scoring model.

With a growing non-qualified mortgage (non-QM) and non-conforming channel, PRMG will be bringing the benefits of FICO^® Score 10 T to its investors. FICO Score 10 T will also provide PRMG with a credit scoring tool proven to increase mortgage loan approvals and reduce loan delinquencies.

“At PRMG, we are always looking for ways to be progressively better in all we do, and we are constantly sourcing the most innovative lending technology to improve the borrower experience,” said Kevin Peranio, chief lending officer at PRMG. “FICO Score 10 T exemplifies PRMG’s mindset, and we know that using scores from this credit model from FICO will take our service to the next level by utilizing the most innovative credit score technology.”

FICO^® Score 10 T provides even greater precision in making lending decisions, helping lenders better manage credit risk and default rates when extending competitive credit offers to consumers. FICO Score 10 T can enable an increase in mortgage originations of up to 5 percent (without taking on additional credit risk) or can reduce default risk and losses by up to 17 percent. The increased predictive power can also help lenders project cash flow more accurately.

“At FICO, our goal is to offer solutions that empower lenders to better and more responsibly serve as many potential consumers as possible,” said Joe Zeibert, vice president of Mortgage and Capital Markets at FICO. “FICO Score 10 T allows PRMG to service a wider variety of investors and aggregators, as well as the secondary market.”

FICO is committed to assisting mortgage industry participants looking to transition to its most current credit scoring model, FICO^® Score 10 T. The FICO Score Migration Resource Center provides a detailed guide to support organizations through their score transition with key planning steps and activities, in addition to implementation best practices.

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 US 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 100 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency. Learn more at www.fico.com.

Learn more at https://www.fico.com/en.

Join the conversation at https://x.com/FICO_corp & https://www.fico.com/blogs/.

For FICO news and media resources, visit https://www.fico.com/en/newsroom.

FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.

About PRMG

‘Built by Originators for Originators’™

For over two decades, PRMG has established a very solid footing as one of the nation’s most innovative and fastest growing, multi-channel lenders in the mortgage space. PRMG boasts some of the best Martech in the business. We know the importance of technology, how it integrates with our systems and platforms, and how to leverage it for our originators and business partners to deliver best in class service! To learn more, visit prmg.net.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520376368/en/

Julie Huang

press@fico.com

Source: FICO

FAQ

What is the impact of FICO Score 10 T on mortgage loan approvals for PRMG?

FICO Score 10 T is expected to increase mortgage loan approvals by up to 5% for PRMG without adding credit risk.

How will FICO Score 10 T reduce loan delinquencies for PRMG?

FICO Score 10 T can reduce default risk and losses by up to 17%, lowering loan delinquencies for PRMG.

What are the benefits of PRMG using FICO Score 10 T?

The benefits include increased mortgage loan approvals, reduced loan delinquencies, enhanced lending technology, and improved borrower experience.

How does FICO Score 10 T support PRMG’s non-qualified mortgage channel?

FICO Score 10 T provides greater precision in lending decisions, which supports PRMG’s growing non-qualified mortgage and non-conforming channel.

What is the role of FICO's Migration Resource Center?

FICO's Migration Resource Center assists organizations in transitioning to FICO® Score 10 T with a detailed guide and implementation best practices.