GENERAL
PARTNERS
CONSUMER IMPACT OF FICO MRI
MortgageReliefOnline.com
MORTGAGE COUNSELING through FICO MRI
MORTGAGE RISK ANALYZER
MORTGAGE RESPONSE ANALYZER
MORTGAGE PORTFOLIO OPTIMIZATION
[Return to FICO® Mortgage Recovery Initiative page]
What is the FICO® Mortgage Recovery Initiative?
We have created the first solution that holistically addresses the U.S. mortgage crisis by providing tools that help consumers, lenders and servicers get ahead of the crisis and prevent future damage. For consumers, the FICO Mortgage Recovery Initiative (MRI) speeds and clarifies the process of mortgage loan remediation. For lenders and services, FICO® MRI provides analytic tools to help them anticipate loan delinquency, optimize loan decisions, and protect the value of loan portfolios. To accomplish these ends it leverages: FICO’s deep experience with lending analytics, new risk scores specifically designed for mortgage lending, extensive experience with consumers’ credit management, and key relationships with government entities and industry partners.
Who are your partners in FICO MRI?
FICO’s partners include the Home Preservation Foundation (a national nonprofit with a network of HUD approved credit counseling agencies), Money Management International (the nation’s largest full-service credit counseling agency), and Equifax (a global leader in information solutions that provides the new FICO® Mortgage Industry Score).
What prompted FICO to develop FICO MRI?
An effective and durable solution – for everyone involved in the mortgage crisis – clearly requires a holistic approach to the situation. Given FICO’s unique perspective on both lender interests and consumer behavior, we felt a responsibility to develop a way for all concerned to get ahead of the situation and mitigate the problem of additional foreclosures.
Does FICO MRI accomplish all that?
Yes. FICO MRI offers an online consumer portal, www.MortgageReliefOnline.com, to streamline the loan remediation process and empower borrowers with knowledge of their options. The consumer portal also provides a new and efficient mechanism for lenders and servicers to reach out to their customer base.
For businesses, FICO MRI offers three sets of analytic innovations that empower them to:
• Identify borrowers most in need of help – before they actually default;
• Identify the best ways to connect with borrowers who need help;
• Ensure that appropriate loan offers are made and that the value of loan portfolios is preserved.
Are consumers charged for this program?
No. Services and educational content are free to consumers.
Will lenders or servicers be charged for this program?
Lenders and servicers will pay normal prices for products and services they receive under FICO MRI.
What's the difference between a mortgage lender and a mortgage servicer?
A mortgage lender is the institution you work with to get a loan. A mortgage servicer is the financial institution that is responsible for the administration of your mortgage loan. Some institutions are both mortgage lenders and mortgage servicers. Other institutions are just mortgage lenders, and they sell the loan to a mortgage servicer who then manages it. Your mortgage servicer receives your payments, keeps track of the principal and interest on your loan, and might set up an escrow account for you. Borrowers can identify their mortgage servicer by reviewing their mortgage bills or coupons.
How does your initiative compare to HOPE NOW?
HOPE NOW is a broad alliance of counselors, mortgage companies, investors and other mortgage market participants. The alliance was encouraged by the Department of Treasury and is devoted to contacting homeowners in distress. We admire their work and share similar goals in supporting homeownership. FICO MRI differs from HOPE NOW in several ways including:
- FICO MRI provides the first comprehensive solution that directly addresses both the problems facing borrowers and the problems facing mortgage servicers and lenders;
- MortgageReliefOnline.com leverages myFICO’s experience and relationships with consumers to help reach out to distressed borrowers;
- For servicers and lenders, FICO MRI offers advanced analytics to help them: 1) better identify struggling consumers before they become delinquent on loan payments; 2) increase the effectiveness of customer outreach programs; and 3) present the most appropriate loan product offers to at-risk customers while preserving loan-portfolio value.
How does a mortgage modification affect someone's FICO score?
That depends on how the creditor reports the change to consumer reporting agencies. If it is reported as some version of "loan not paid as agreed," then the change could lower the borrower's credit risk score.
Who is HPF?
The Homeownership Preservation Foundation is a Minneapolis-based 501(c)(3) nonprofit dedicated to reducing foreclosures and preserving homeownership for American homeowners. The foundation partners with city, county and state governments, federal government agencies, community-based nonprofit organizations, and mortgage companies to offer creative solutions to overcome obstacles that could result in the loss of their homes.
Who is MMI?
Money Management International (MMI) and its family of Consumer Credit Counseling Service (CCCS) agencies make up the largest nonprofit, full-service credit counseling agency in the United States. MMI has provided counseling services to thousands of US homeowners in need of mortgage relief.
Who is Equifax?
Equifax is a global leader in information solutions that leverage one of the largest sources of consumer and commercial data, along with advanced analytics and proprietary technology, to create customized insights that enrich both the performance of businesses and the lives of consumers.
Are you working in collaboration with Making Home Affordable (MHA)?
The FICO MRI solution complies with the federal Making Home Affordable (MHA) program under President Obama’s Homeowner Affordability and Stability Plan (HASP).
What is the MHA program?
Making Home Affordable (MHA) is the government's program to help up to 7 to 9 million US homeowners avoid foreclosure by modifying the terms of their loan or refinancing their current mortgage.
How does your initiative compare to the MHA program?
We applaud the government’s Making Home Affordable program and have incorporated its guidelines into MortgageReliefOnline.com. In addition, our FICO MRI solution for servicers and lenders can help them implement the MHA guidelines. FICO MRI includes innovative components that help servicers and lenders to: 1) better identify struggling consumers before they become delinquent on loan payments; 2) increase the effectiveness of customer outreach programs; and 3) present the most appropriate loan product offers to at-risk borrowers while preserving loan-portfolio value.
Will your initiative expire when MHA’s program expires (e.g., refinancing June 2010, modification 2012)?
It’s too early to say. We anticipate that FICO MRI will evolve to include additional partners and expand its solution set as the financial crisis changes.
What is HASP?
HASP stands for the federal government’s Homeownership Affordability and Stability Plan. President Obama introduced HASP on February 18, 2009.
How many consumers might be helped by mortgage modification and a service such as MRI?
According to federal Treasury officials, the government’s Making Home Affordable (MHA) program could help 7 to 9 million homeowners. That is roughly 17 percent of the nation’s estimated 52 million residential mortgage holders.
How does FICO MRI compare to competing mortgage modification services?
Our service is free to consumers. It brings together the experience and skills of trusted non-profit and public companies. And it is the first solution to holistically address the separate but intertwined needs of consumers, lenders and servicers that have been triggered by the mortgage crisis.
Does FICO MRI help borrowers reduce their monthly mortgage payments?
Not directly. We will attempt to determine if the borrower qualifies for mortgage relief under Making Home Affordable (MHA) guidelines. The borrower’s mortgage servicer will ultimately be responsible for deciding whether the borrower qualifies for a loan modification or refinancing.
How does participating in FICO MRI affect consumers’ FICO® scores?
FICO scores are not affected by engaging with www.mortgagereliefonline.com. It should be noted that any subsequent loan change or workout may be reported by the lender to credit bureaus, where the information could affect the borrower’s future FICO scores.
What do consumers get when they go to the FICO MRI website?
Visitors are encouraged to complete a short, confidential online form about their current housing and mortgage situation. Their information is instantly evaluated and they are told if they appear to be eligible for 1) loan modification and credit counseling, 2) loan refinancing, or 3) debt counseling. Eligible borrowers are contacted within 48 hours by a professional credit counselor from Money Management International (MMI) for free, confidential assistance. MMI submits the borrower’s mortgage relief information to his or her loan servicer as appropriate. The servicer then works with the borrower to determine the best next step.
Does your solution guarantee that a borrower will get mortgage relief if you determine that the borrower is eligible?
No. www.MortgageReliefOnline.com is intended to help US homeowners understand the Making Home Affordable program guidelines. We will attempt to determine if the borrower meets the guidelines for mortgage relief under MHA, but the mortgage servicer will ultimately be responsible for deciding whether the borrower qualifies for loan modification or refinancing.
What if a borrower is not eligible for these programs but is still struggling to pay their mortgage?
One option would be a debt management plan through MMI. This is something that the MMI credit counselor would likely discuss with a consumer who engaged with www.MortgageReliefOnline.com.
Will FICO MRI help borrowers avoid the long waiting periods before their loan servicers will respond?
One goal of FICO MRI is to connect borrowers directly with their servicers, bypassing the long lines and delays that consumers often experience today. This will happen as more and more servicers join FICO MRI
How can FICO ensure that this process is completely confidential?
Both FICO and MMI have many years of experience working with highly confidential consumer information and protecting the privacy of millions of consumers.
How does credit counseling work under FICO MRI?
Based on the information that consumers provide through www.MortgageReliefOnline.com, they will be told if they are eligible for free credit counseling. A FICO®-certified professional counselor from MMI will contact them to discuss possible mortgage and budget solutions based on their specific circumstances. The counseling is completely confidential and free to the consumer.
What should borrowers expect when the certified professional counselor contacts them?
The objective of the call with a MMI certified professional counselor is to help the borrower determine the best long-term solution. The counselor will help the consumer identify budget concerns as well as prepare the consumer’s case for the mortgage servicer, as appropriate. MMI counselors are well-versed in documentation and information required by lenders and servicers.
What does it mean that MMI counselors are “FICO certified”?
MMI credit counselors are the first in the nation to undergo special training on FICO credit scores, in a program developed by FICO and MMI. This knowledge helps them to understand how different financial actions taken by the consumer might affect the consumer’s FICO score, and by extension affect future decisions by lenders and servicers. Accordingly MMI counselors who are FICO certified can provide better guidance to people who are struggling with their mortgage loan payments.
Can other counselors or businesses also become “FICO certified”?
Yes. Interested parties should contact FICO’s partner AllRegs for FICO certification training.
What is the FICO® Mortgage Risk Analyzer?
By leveraging FICO scoring analytics including the newly launched FICO Mortgage Industry Score, the Mortgage Risk Analyzer helps servicers to more accurately identify mortgage loan holders who are most likely to default or need assistance, before they become delinquent. Integration of the FICO Mortgage Risk Analyzer with www.MortgageReliefOnline.com provides an efficient mechanism for servicers to manage large volumes of loan remediation requests.
When would a mortgage servicer use the FICO Mortgage Risk Analyzer?
The tools in the FICO Mortgage Risk Analyzer help lenders to:
• More accurately identify those mortgage loan holders at risk;
• More effectively target outreach activities;
• Increase efficiencies and reduce costs by focusing resources on the right customers.
What is the FICO® Mortgage Score?
The FICO Mortgage Score is a new FICO industry score specifically designed to help mortgage lenders make the best possible risk decisions when addressing both current homeowners and those aspiring to own. It builds upon the predictive power of today’s FICO credit risk score which is widely used in the mortgage industry. In validation testing, the new score identified up to 25 percent more of the high-risk mortgages and home equity lines-of-credit that later became seriously delinquent. In light of today’s housing crisis, this new score can aid servicers in earlier identification of borrowers at risk, mitigating the high cost of consumers moving to foreclosure. It is available today from Equifax under the brand name BEACON Mortgage Score.
How far in advance can FICO accurately predict that a consumer will become seriously delinquent on a mortgage?
The FICO credit score and FICO Mortgage Score both predict the likelihood of default within 24 months following the score calculation.
What is the FICO® Mortgage Response Analyzer?
The FICO Mortgage Response Analyzer is a set of industry-hardened analytics by FICO that help servicers to design highly effective outreach campaigns to attain the highest borrower response and conversion rates, for maximum success in loan remediation.
How does the FICO Mortgage Response Analyzer work?
To help a lender or servicer identify the optimal outreach strategy for individual borrowers, the FICO Mortgage Response Analyzer brings together FICO analytics, credit bureau data, FICO scores, a lender’s own master file information on loan holders, and information from the loan portfolio. After the initial outreach strategy has been implemented, the resulting new response data is added to the FICO Mortgage Response Analyzer to re-assess and adapt the strategy for continuous improvement in response rates.
When would a mortgage lender or servicer need it?
The tools in the FICO Mortgage Response Analyzer help lenders and servicers to:
• More accurately identify the communication method that will result in highest response and conversion rates;
• More effectively target messaging approaches to the right customers;
• Substantially increase the return on customer outreach programs through increased response and conversion rates.
What is FICO® Mortgage Portfolio Optimization?
By applying advanced analytics for complex business rules, FICO Mortgage Portfolio Optimization helps servicers present the most appropriate loan product offers to at-risk customers while preserving their loan portfolio value. Delivered on proven FICO platforms, Mortgage Portfolio Optimization provides a work-flow infrastructure and analytic logic that result in better management of portfolio risk.
Is FICO Mortgage Portfolio Optimization a product or service?
It is both a set of advanced tools and a process for using them.
How does FICO Mortgage Portfolio Optimization work?
FICO Mortgage Portfolio Optimization is an advanced analytic solution that is customized on FICO’s decision-optimization software platform to meet the specific needs of the servicer. First, FICO works with the servicer to build an analytic model that incorporates action-effect models, FICO analytics, and the servicer’s own analytics. Next, the model is imported into the servicer’s system where net present value of a target portfolio is calculated and the best client action is determined under any identified constraints. The model is then deployed to FICOTM Blaze Advisor® software platform, offers are extended to the servicer’s customers, and the effectiveness of the strategy is assessed so it can be adapted and implemented again.
When would a mortgage servicer need it?
FICO Mortgage Portfolio Optimization helps servicers to:
• Reduce losses from foreclosures by presenting the right loan product to the right customer;
• Promote customer loyalty while preserving portfolio value;
• Develop alternate scenarios based on different business objectives.