Mortgage lenders are transitioning to modern credit scoring models like VantageScore 4.0 and FICO 10T, though secondary market investors are limiting these loans in securitization pools until more performance data is available. This shift requires FinTech developers to manage dual scoring systems and navigate potential rating caps that could increase the cost of capital for alternatively scored borrowers. The industry is awaiting the release of historical FICO 10T data to establish necessary risk benchmarks.
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Ali NematiWritten by Ali
