FICO’s Web Initiative May Help Those Seeking Loan Modification

FICO/Fair Isaac, the company that manages the all-important credit-scoring formula used by lenders when making mortgages, today unveiled Mortgage Relief Online, a new website that supposedly lets you know within seconds whether you qualify for a loan modification or refinancing under the Making Home Affordable Program.

Here’s Wall Street Journal blogger Mary Pilon’s take on the site/service:

If a borrower fills out the form and qualifies for free mortgage counseling, Fair Isaac will give applicants a free credit score and credit report. (You’re entitled to your free credit report once a year from each of the three credit reporting agencies at annualcreditreport.com.) But you don’t get a free credit score for just filling out the online form. (Applicants must complete a mortgage counseling session first.)

A handy flowchart explains how the mortgage-assistance process on the site works. However, Shon Dellinger, vice president for Fair Isaac’s consumer division, says “we don’t want to turn this into a site that people game for fixing their score. We want them to fix their mortgages.”

The Mortgage Risk Analyzer tool aims to identify mortgage holders who may be likely to default. The hope is that consumers can reconfigure mortgages before they become delinquent.

Considering that Fair Isaac also helps financial institutions manage the risk in their mortgage portfolios, it makes sense that they want to identify trouble before foreclosure proceedings begin. There’s also concern about more adjustable-rate mortgages resetting and the questionable effectiveness of mortgage modifications.

The information submitted by consumers is confidential. After borrowers complete the online form and find out what they’re eligible for, then the borrowers decide whether or not to send information on to a mortgage counselor. The mortgage counselor only passes on consumer information to lenders with the borrower’s permission. In other words, your lender won’t know that you used the site unless you let them know.

Ralph R. Roberts, GRI, CRS
Award-Winning REALTOR® and Author
Loan Modification For Dummies (avail. Summer 2009)

2 Comments

  1. It’s always a good idea to think about - and see what the options are. Lee McD

  2. Great info..I wonder, does FICO plan to help facilitate loan modifications for homeowners?

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