Pennymac deploys VantageScore 4.0 across all production channels

Pennymac Chairman and CEO David Spector stated that the company aims to be at the forefront of credit score modernization, believing it will reduce costs and promote homeownership. The company's decision follows recent announcements from the Federal Housing Finance Agency (FHFA) and the Department of Housing and Urban Development (HUD) that opened the conventional and Federal Housing Administration (FHA) markets to competition among credit scoring models.

VantageScore 4.0 differentiates itself by using trended credit data, which allows for an evaluation of a borrower's credit management history over a period of up to 24 months, rather than relying solely on a single snapshot of their credit file. Pennymac anticipates that its significant presence across its three production channels could accelerate the adoption of this model, particularly through its correspondent business, where it works with numerous community lenders, credit unions, and regional banks.

Spector also noted that the increased availability of competing credit-scoring models could spur innovation and price competition among providers. He expressed gratitude to FHFA Director Pulte and HUD Secretary Turner for advancing this initiative, highlighting that the credit scoring market has historically lacked competition, leading to higher closing costs for borrowers.