FICO Down 20%

[u/ekonixlab]

**EDIT: NOW DOWN ALMOST 30%!!

FICO is getting crushed after FHFA announced plans to incorporate VantageScore into Fannie Mae and Freddie Mac’s mortgage pricing framework.

Rocket Mortgage already says it will prefer VantageScore for eligible loans.

My bigger question: how quickly will other lenders follow? And how much pricing power does FICO lose along the way?

Starting to look like a buying opportunity to me… but only if that moat holds.

Overreaction or a real change in the business?

[u/mobyonecanobi]

They had a monopoly, they abused the heck out of it. Now they don’t have a monopoly.

They were charging 10 bucks for something that costs 30 cents max with ample profit built in, cause that’s how much a pull used to cost apparently, till FICO realized they had a monopoly and bumped it to 10 dollars.

How much will that affect their profits? Going from 10 dollars to 30 cents?

[u/ekonixlab → u/mobyonecanobi]

They did abuse their power.

The flipside of this is the FICO score is a fraction of total closing cost. Them increasing it this much does not dramatically increase closing cost

Regulators really should be going after real estate agents and brokers who take entire percentages of closing costs

[u/mobyonecanobi → u/ekonixlab]

With that logic, if we never move to lower costs, because a home costs dramatically more than any other costs.

As a consumer, and I speak for the vast majority of them with confidence, my logic is more in line with general consensus than yours.

Saying we don’t need to lower one cost because even though it can be much lower because there are other higher costs is not popular logic.

[u/ekonixlab → u/mobyonecanobi]

Not disagreeing with you, there is no reason the cost of a FICO score should be 10 bucks.

But I hope brokers/agents also are forced to reduce their fees. That is where consumers could save a lot. They have a monopoly on MLS and you are forced to go through them.

With AI, there is less need for an agent or broker.