As lenders reached the final stretch of a very challenging 2022, they were met with the news of yet another obstacle. One that adds an additional layer of financial strain to an already struggling industry. Obviously, any financial increase for our industry adversely impacts the American homebuyer. Especially when there is very little to zero margin that allows the lenders to absorb the increase. As most everyone knows at this point, FICO has increased their fees by 400% for Tier 3 Lenders.
What is a Tier 3 Lender? Long and short, most of all lenders. There are 46 lenders in Tier 1 and 6 lenders in Tier 2. They state the tiers are based off volume. Up until this point, FICO has charged a $.60 royalty to all lenders, regardless of size. As of 2023, the playing field will be uneven based on your tier.