It has become increasingly evident that a borrower's FICO score is one of the most important issues to be considered by financial institutions that underwrite mortgages. One's FICO score, or credit score, should be one of many issues that a lender looks at when making underwriting decisions. According to a Connecticut mortgage broker who has been in this industry since 1994, it seems as though the credit score is the most important factor looked at in a loan application, resulting in denials for mere points below the loan criteria. The importance placed on borrowers' FICO scores may have a seriously negative impact on their ability to qualify for certain interest rates or to qualify for a loan at all.
Craig Watts, the head of communications at FICO, had a slightly different take on the matter. Though he did not discount the importance that FICO scores were given by lending institutions in their decisions to provide loans to borrowers, he indicated that FICO scores are simply a tool that lenders use to manage their risk. It would be virtually impossible for these large financial institutions, making thousands of credit decisions every day, to make the decisions they make without some sort of standard benchmark. The credit score provides this benchmark and has become somewhat of a "line in the sand" for lenders, although they will also look to other important factors: the amount of equity one has in their home, job stability, cash reserves and debt-to-income ratio.
If you are seeking helpful information or legal counsel in regard to your debt, mortgage loan or foreclosure, an attorney at Jacoby & Jacoby may be able to help. The firm handles
bankruptcy, foreclosure defense,
loan modification and various other debt relief matters for clients throughout Long Island. The experienced team understands how to protect clients' rights and financial interests in these matters and stands ready to help you.
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