| This course presents an overview of credit scoring and its use in mortgage lending.
Students will learn what credit scores are, how they are determined, and how they are used in the qualifying,
underwriting, servicing, and portfolio management areas of mortgage lending. This course will
concentrate on what a 'credit score' is, how it is used by mortgage lenders, and its major advantages;
factors and process of generating credit scores; and the major investor guidelines for
underwriting an application based on its FICO score.
Course Outline:
Lesson 1 - Overview of Credit Scoring in Mortgage Lending
- What Are Credit Scores?
- History of Credit Scores
- What Role Do Credit Scores Play in Mortgage Lending?
- What Do Credit Scores Tell Us?
- Advantages of Credit Scores
- Three Reasons to Use Credit Scores in Mortgage Lending
Lesson 2 - Origination of Credit Scores
- Where Do Credit Scores Come From?
- How Are Credit Scores Generated?
- The Statistical Model
- Factors in a Credit Score
- Consumer Reporting Agencies
- FICO Scores
- Predictive Variables
- Weighting Variables
- Reason Codes
- Varying Credit Scores
- Multiple Scorecard Segmentation
- Imperfect Credit
- Nontraditional Credit
- Other Evaluation Models
Lesson 3 - Credit Scores in Risk Assessment
- Risk Assessment
- Primary Risk Factors
- How is Risk Weighted?
- Balancing Credit Score and LTV
- Contributory Risk Factors
- Loan Level Price Adjustments
- Nonprime Credit Scores
- Challenging the Credit Score
- Extenuating Circumstances
Course Credit:
Completion of this course earns five points toward MBA's Certified Mortgage Banker (CMB), or
Certified Mortgage Technologist (CMT) designations. This course also earns five points towards
MBA's Residential Underwriter (CRU Level I) Achievement Certificate program. |