Ohio-based national direct lender Liberty Home Mortgage is the latest company opting for the FICO 10T model, announcing it would start employing it for nonconforming originations. Liberty joins several other companies already using 10T for nonconforming loans, including Movement Mortgage and Crosscountry. In the first quarter of this year, Primis Bank, Premier Lending and Cardinal Financial, likewise, all agreed to begin use of FICO 10T for certain types of originations.

Introduced in 2020, the FICO model was selected along with Vantagescore 4.0 by the Federal Housing Finance Agency as one of two score models lenders will eventually need to consider when underwriting to make them eligible for sale to government-sponsored enterprises. The use of two new models will replace the FICO Classic score, which has been a requirement for two decades.

Full implementation of the FHFA plan is expected to occur by the end of 2025, although some elements of the proposal are likely to come sooner. 

Rather than wait for mandated changes to arrive, a small number of lenders began working with the 10T model as recently as last year for nonconforming loans sold to private investors. In February, Cardinal Financial said it would begin looking at 10T scores specifically for Department of Veterans Affairs originations, which are also not sold to Fannie Mae or Freddie Mac and don't have a specific requirement for this type of credit metric like they do. Cardinal was the first to announce it would use the model for VA loans.

FICO claims the predictive analysis offered through 10T can increase originations by as much as 5%, while reducing default risk by up to 17%.

The addition of Liberty Home Mortgage to the list of FICO 10T users comes a week after Planet Home Lending also said it would incorporate the model in its recapture analysis of its servicing portfolio, which contains government-backed and conventional mortgages from its distributed retail channel or correspondent division. 

"We're eager to tap the power of FICO Score 10T to further analyze our book of business and unlock new origination opportunities," said John Bosley, Planet Home Lending mortgage president, in a press release.  

Planet Home's use of 10T also points to the growing consideration of new scores in broader contexts within the mortgage industry. In February, the Federal Home Loan Bank of San Francisco indicated it would begin accepting mortgage collateral from lenders using Vantagescore 4.0.

With the most recent additions, FICO 10-T is now in use in some aspects of the business at mortgage companies with a combined cumulative origination volume of more than $100 billion, the data analytics software provider said. Those same companies service nearly $300 billion in mortgages.