According to HousingWire, United Wholesale Mortgage has announced a significant change to how it evaluates borrower creditworthiness. The company will now pull both a FICO score and a VantageScore 4.0 for every applicant, then automatically use whichever score produces the better result for that individual borrower. This approach means each person gets the lowest possible payment and mortgage insurance costs available to them.
The reasoning behind this move is straightforward. UWM's research suggests that by having access to both scoring models and choosing the one that works best, many borrowers could potentially save thousands of dollars over the life of their loans. For mortgage brokers working with the lender, this also simplifies things considerably since they no longer need to make strategic decisions about which scoring model to use.
This development comes in response to broader changes happening in the mortgage industry. The Federal Housing Finance Agency has been pushing Fannie Mae and Freddie Mac to work with multiple credit scoring models, including VantageScore 4.0 alongside traditional FICO scores. According to HousingWire, the FHFA has implemented a single pricing framework that works with either model, giving lenders more flexibility in how they evaluate credit.
UWM isn't alone in this approach. HousingWire reports that competitor Rocket Mortgage conducted a substantial test using credit reports scored with both models on over a million borrowers. That testing found that some borrowers who previously might not have qualified actually could qualify using VantageScore, and those who benefited from the alternative score saved an average of $1,600 at closing.
UWM's leadership framed the change as part of a bigger mission. According to HousingWire, the company's president and CEO stated that the goal is to give borrowers the best possible outcome while making it easier for brokers to operate, with the system handling the credit model comparison automatically so consumers don't have to worry about the technical details.
What I'm seeing locally here in the Bay Area is that these kinds of operational improvements at major wholesale lenders eventually make their way down to help borrowers in our market. When a big player like UWM simplifies their process and creates more savings opportunities, it puts pressure on other lenders to do the same. For buyers and sellers in Fremont and throughout the East Bay, this could mean better financing options and potentially more purchasing power for qualified buyers, which can only help in our competitive market.
