The Fourth Installment Of A Fiveinstallment Series

The Federal Reserve Bank of St. Louis

Mortgage Credit Partnership Credit Scoring Committee

Credit scoring is an underwriting tool used to evaluate the creditworthiness of prospective borrowers. Used for several decades to underwrite certain forms of consumer credit, scoring has become common in the mortgage lending industry only in the past 10 years. Scoring brings a high level of efficiency to the underwriting process, but it also has raised concerns about fair lending among historically underserved populations.

The mission of the Federal Reserve System's Credit Scoring Committee is to publish a variety of perspectives on credit scoring in the mortgage underwriting process, specifically with respect to potential disparities between white and minority home buyers. To this end, the committee is producing a five-installment series of articles. The introductory article provided the context for the issues addressed by the series. The second article dealt with lending policy development, credit-scoring model selection and model maintenance. The third article explored how lenders monitor the practices of their third-party brokers, especially for compliance with fair-lending laws, pricing policies and the use of credit-scoring models.

The fourth article focuses on staff training, the level and consistency of assistance provided to prospective borrowers and the degree to which applicants are informed about the ramifications of credit scoring and data accuracy in the mortgage application and underwriting process.

Representatives of three organizations were asked to comment. They were selected because of their different perspectives on credit scoring and fair lending.

Credit Repair

Credit Repair

If You Are Interested In Raising Your Credits, You Won't Want To Miss This Page! Worried About Your Bad Credit? Fret Not! Discover Insider Secrets To Quickly Get Out Of Debt, Erase Your Bad Credit Record And Legally Raise Your Credit Score! Finally! An Info-Packed Guide To Help You Understand The Nuts-And-Bolts Of Credit Repairs And To Assist You In Increasing Your Credits In No Time! Learn Some Little-Known, But Highly Effective Tips And Tricks That Will Shoot Your Credit Score Up!

Get My Free Ebook


Post a comment