[David] Let’s get over to Alice Alvey. She’s gotta leave a little early today, so we’re gonna interrupt the order and go over to Alice. Alice, good to have you here friend.
[Alice] Hi Dave. Hi everyone. Just to dovetail a little bit off of the announcement this week on the Vantage score and just wanna put a little history on that. It’s interesting how some people feel like this is big news and others are okay, we already know this. The issue really is how do we get the adoption in the markets as well as get the technology working. The timeline on this goes all the way back to 2022. And even earlier than that, Dave, we’ve been talking about Vantage scores for many years on this show. If you have those in your archives, Dave, those might be some. We should pull some of those out. Yeah, absolutely. Yeah. And listen to, to get the scoop on the advantages, although there’s lots of great stuff online to be able to learn about the benefits. So I’m all for, let’s get the adoption rolling, but we have a lot of technology infrastructure to try and build around that, to add this model within the scoring. So it’ll be interesting and we’ll watch that as that unfolds. The only real big I shouldn’t say big, but the other announcement I would say is to keep in mind that we do have still two items open for comment.\ The Department of Labor. Yeah. Fin Sun rule. Those changes there’s four components that are up for discussion there in the anti-money laundering and the countering financing of terrorism rules. So you have still a lot of time to respond to that, so take your time to read through that. You have until June 9th to be able to respond to that one, but you only have one day left to respond to the Department of Labor’s proposed rule on classifying someone as an employee when the worker may be classified as an independent contractor. Check that out. You’ve got one day left to comment on that one. And those are the two big things that are outstanding for people to take action on as of today. Dave, I’ll turn it back to you.
[David] Thank you, Alice. Thank you. Appreciate that very much, Bill?
[Bill] So, if I can piggyback off of the last two segments, which is I heard a little bit of a different announcement from Cote.
[David] Interesting.
[Bill] What I heard is we, FHFA have been working on this initiative for four years and we haven’t been able to figure out how to address the LOS side, the product and pricing engine side. The compliance of allowing shopping for credit vendor. Yeah. Yeah. Haven’t figured out the fact that FHA is not on board with this. So we’re just gonna throw this out to see if any lenders are dumb enough to sign up to be a pilot and figure out the rules for the entire industry.
[Alice] No, I love that you just went straight for the jugular. That’s right. That is the truth.
[David] It is so true. Four and a half years. There’s certain more and more rumors coming out that Pulte days are numbered. As soon as Walton confirmed, I will be seeing an announcement that Pulte will be replaced. I put kid’s Damian to to replace ’em there. So I thought that’d be worth it to have, but no, that, that’s spot on. Good. Addition to the commentary. Disappointing.
[Bill] Seriously, Alice clearly keeps track of things over the years, so I do as well and went back and looked at some of the things from. The last time I was participating in meetings on this and there was none of the key issues that were on the table, then could I find a way to check off as having been addressed?
[David] Yeah, it’s about results. If you know anything about watching the what happened to Pam Bondi, as good as she is or was, or is she’s no longer there because of results, delivering results. And I think we are not getting results delivered in a number of areas. It relates to housing and credit finance and reducing costs. So I’m anticipating some changes. So Alice, thank you so much for the update. Bill. Thanks for chiming in. Mr. Kittle, do you have any thoughts you wanna add to the Alice’s segment?
[Kittle] What Alice said, what Bill said, and you’re doing that? Another ditto. Huh? Ditto. Ditto. Dito. The, I’ll use the word the. I hate to use the word stupid. Uninformed stupid. I’ll use stupid. The stupidity of the changes that have been attempted to be made for N-F-H-F-A, first of all, going in there and pointing yourself, president of both G as is right, and you’re also running to the CFPB technically and FHFA, and literally nothing’s gotten done except this debacle and an attempt at a 50 year mortgage, which was a joke,
[David] which was absolutely, you want,
[Marc] I gotta chime in on that, David. Both David that’s because of a three letter word. It starts with a e ego. Okay. Ego ego. Yep. Yeah. Hey, let me chime in here rather than later about the credit score. I know more about credit scoring right now than I thought I’d ever do in my life with all the research I’ve done in the last four months. And it’s a joke. Guys when I did my first loan as a loan officer, credit scores were costing 15 bucks. Now credit scores are costing hundreds of dollars, and it’s a joke. It really is a joke when everything’s done electronically. Now, back when I had a credit score done, when I, I did my first mortgage loan as a loan officer. You had these little local credit bureaus and they were checking local credit and they were merging stuff in from all over where the people had lived. In the past and all that, they actually worked for that $15. Nobody works for this couple hundred dollars. They push a couple buttons and it happens. Now I believe that’s the problem and that’s the problem that needs to be fixed. And the only thing that’s gonna fix that is competition. Do I think Vantage score is gonna be any better than a tri merge we use today? Yeah, I don’t think so. It might be
[David] It does bring in some more it does add more to the market mark. ’cause I did it. It does it’ll bring in because of the way they factor it in. So I’m glad to see a new participant, but I’m like, you discouraged. You do know that when you say back in the day when I, that makes you sound really old. So we we may try to edit that out. You may be you. I’m not really old. That was in 1977. Couldn’t resist Mark anyway. Good.
[Marc] But I think. As we go through this, I think it’s gonna be a positive thing long term, but I think there’s a lot of concerns about things that aren’t gonna be major concerns. So system stuff will come around fairly soon because it’s not a major change to it. And they’ll get it. And I think we need to do this for customers if we know anybody. But then again. What realistically is, put that note out there about saving money for customers? How much is it gonna save? Are they gonna go down from $250 to $200 or is it gonna be back where these things are a lot more realistic than before. And I think we all know the answer to that. Without me saying it, it won’t go down that much. So we’ll see what happens. So I got open eyes on this to see if I learned anything at all in the last four to six months researching that stuff. But, so we’ll see how it happens.
[David] We’ll see how it happens. A go ahead.
[Alice] To your point about cost mark, it’s gonna be whether or not we will be able to go with just the one. And so you can’t imply that it’ll just be I am just ordering a vantage score. That’s right. Do I? That’s right. Do I still need to have at least something else from one of the other repositories in the file for backup in case I need another investor or for multitude of reasons we don’t even know how those, am I gonna be able to commingle these loans in with FICO scores in a security? We don’t know any of that right now.
[Marc] Yep, that’s true.
[David] Allen, before we move off of this segment, you wanna add 2 cents? Always some technology in the mix.
[Allen] Yeah, there’s just going to, there needs to be the addition of tech and a lot of lenders are frustrated with their tech providers. No matter how much they love them, it doesn’t matter because changes can’t get done quick enough or they have to roll ’em out, or they’re not tested or they cost more money. You guys know the drill. So there’s a technology piece to this as well. It’s not just, Hey, I want to use the vantage core, those days where you just wanna use something or over.
[David] Yeah. I think you raised up the a good point, but one of the questions I have, Alan, is when we have the technology we do, why are we paying 10 x. From back in the days when a lot of us were originating loans back in the seventies, it’s 10 to 20. I love just a,
[Allen] I love that you say that. And people that are not in our industry ask me that same question. And when I tell them about, I’m not gonna mention their name, but another company who charges 30% of your invoice in order to do business with them, it, they’re like, wait a minute. That’s like the mafia that’s allowed. And I’m like like our industry is based on that, unfortunately. It’s just the way it is. And everybody charges everybody and the cost goes up because nobody can operate or afford to do business. And so the lender in the end is the one that you know, is paying for it death by a thousand cuts. Yeah, it was very cool. Maybe in the late nineties, early two thousands when, this rev share model came out. But the rev share is definitely an impediment to lenders lowering costs and vendors being able to make money For sure.
[Alice] One thing I’ll add too is don’t underestimate that you need a policy as a company on how you are going to balance vantage score versus the other FICO models and the amount of retraining it will take for the conversation your loan officers have with borrowers and restructuring on how they approach this initially and how they make those choices. So there’s a lot that’ll be real important to get consistent and done right on the front end so borrowers aren’t discouraged and confused.
[David] Great point, Alice. Great point. Good discussion. Alice, thanks so much for your segment. It looks like. Yes. Oh, I’m sorry. I’m missed you. You went off my screen. I need a wire. Sorry. There you go. Widen my screen. So there you are, you’re back.
[Kittle] It’s okay. I’m easily forgotten by you looking. It really hurts sometimes. To what Alice is saying there is exactly right, but let’s think about something the oxymoron of the concern around Vantage score. It’s been around since 2006, 20 years. Yeah. Okay. And Barrett Burns, along with Phil Brack worked there. Yeah. Is a champion of this. Let’s not forget who owns Vantage Score. Experian. TransUnion? Yes. A Equifax. Yes. Okay. And we’re worried about whether or not we can get in and accept their modeling and they don’t dive in with both feet. They put it off by, with this announcement over to the side when three major bureaus own the DAG on thing. Yeah. It’s just, that’s a great point.
[David] It is stupid. And to your point earlier when you were talking about what Mark said, it does allow a lot of people that otherwise wouldn’t have credit. The way the modeling for Vander school was so far ahead of this time, they just ought to say, if somebody new goes into FHFA soon, they need to take another look at this and bless it and say it’s okay to use bingo with no inhibition. We don’t have to wait another five or six years to see how the scoring models do. My God, again, the three bureaus own this thing. So that’s my soapbox.
Alice Alvey, Master CMB
She handles development of their World Class Training program designed to support UHM partners and organizational effectiveness.
Prior to UHM, Alice served as Senior Vice President at Indecomm leading the Indecomm-Mortgage U division, Internal QA and Compliance and SaaS technologies. Indecomm acquired Mortgage U in 2013, where Alice was President/Co-founder, providing training and consulting since 1996. Prior to MU she served as SVP of Operations at a national bank overseeing operations for wholesale, retail and correspondent from underwriting through servicing, and compliance.
She has been in the trenches of mortgage lending operations from application through servicing for over 30 years. Her authoring work in training content, policies and procedures and the FHA/VA Practical guides illustrates her ability to bridge regulatory requirements with day-to-day operations.
Alice has been a weekly contributor to the Lykken on Lending show since its beginning in April 2009 and has made her weekly contributions to 450+ episodes!