A borrower has identical credit scores across all three bureaus, but different mortgage lenders are quoting different rates based on credit. What is the most likely explanation?
Correct Answer
A) The lenders are using different credit score versions or models
Even with identical scores, lenders may use different FICO score versions (FICO 2, 4, 5 for mortgages vs. FICO 8, 9 for other purposes) or different credit models entirely. Additionally, lenders may have different risk-based pricing matrices that result in different rate quotes for the same score.
Why This Is the Correct Answer
Even with identical scores, lenders may use different FICO score versions (FICO 2, 4, 5 for mortgages vs. FICO 8, 9 for other purposes) or different credit models entirely. Additionally, lenders may have different risk-based pricing matrices that result in different rate quotes for the same score.
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An MLO discovers that a borrower's credit score dropped significantly after loan approval but before closing. The borrower had qualified for standard PMI rates. What is the most appropriate action regarding PMI?
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