Mortgage Capital Trading, Inc. (MCT) and FICO have announced a strategic collaboration to integrate FICO® Score 10 T into MCT Marketplace, the largest U.S. mortgage asset exchange.
This integration is designed to enhance pricing and risk assessment for mortgage lenders and investors, said Tom Farmer, Chief Investment & Corporate Development Officer at MCT.
“By integrating the new FICO Score 10 T into secondary marketing processes," Farmer explained, "we hope to help the 50 percent of delegated correspondent sellers and 95 percent of correspondent buyers that we serve to expand their opportunities and optimize their margins.”
FICO® Score 10 T has been marketed to offer greater precision in lending decisions, potentially reduce default risks by up to 17%, and enable lenders to extend more favorable loan terms.
"Today’s announcement underscores MCT’s leadership in redefining how credit risk is measured and managed,” said Devin Norales, director of mortgage and capital markets at FICO. "By leveraging FICO Score 10 T, they are improving credit risk transparency for investors while building a stronger foundation for long-term portfolio performance.”
While lenders and consumers will purportedly benefit from the adoption of FICO 10 T, the mandated, industry-wide transition to the updated model has not been without challenges.
Freddie Mac and Fannie Mae have displayed little motivation by way of helping the process along, remaining “absent” according to industry sources as the late-2025 deadline for complete integration inches closer.
MCT is not the first company making strides to get ahead of the curve, however. Last month, Cardinal Financial completed the first trade of a government-issued mortgage-backed security (MBS) pool consisting of VA loans evaluated using FICO’s 10 T score.
The FICO 10 T integration at MCT is expected to be completed by mid-2025, and will allow users on MCT Marketplace to optimize their strategies and better manage credit risk.
Greg Richardson, EVP of Capital Markets at Primis Mortgage, shared, “Leveraging FICO Score 10 T has provided our team with a deeper understanding of credit risk and pricing precision. This advanced predictive analytics tool has not only streamlined our operations but also opened up opportunities to offer more competitive rates to qualified borrowers.”
