The C-Suite
Three of the Biggest Challenges Currently Facing the Mortgage Industry BY PHIL BRACKEN, VANTAGESCORE
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RAPIDLY CHANGING HOMEOWNER DEMOGRAPHICS
he mortgage industry is at a tipping point. Unalterable institutions and legacy systems that have defined the mortgage finance paradigm for decades are showing their age. As it stands today, millions of consumers can’t attain credit scores, real estate loans are more expensive to produce than ever before, and the United States has a full-fledged single-family home inventory crisis. These facts underscore three major underlying systemic issues facing the mortgage industry that have received little attention relative to their substantial impact. The MORTGAGE BANKER Magazine
The Harvard Joint Center for Housing Policy projects that approximately 75 percent of all new household formation in the United States over the next decade will be by people of color. While the U.S. has far to go with respect to eliminating racial income inequality and socioeconomic disparity, the fact is the American middle class is more diverse than it has ever been. Traditional mortgage credit scoring models, which remain in place and virtually unchanged since the 1990s, are increasingly 50
April 2020
