Case Study: Leading Mortgage Service Company achieves $2–31M annual savings by improving early-stage risk prediction with FICO® 8 Mortgage Score (FICO)

Leading mortgage servicer finds strong value in new industry score

A top-tier U.S. mortgage lender and servicer tested a way to improve early-stage risk detection to curb losses and make servicing more cost-effective. Facing changing credit dynamics and pressure from declining property values, the firm focused on improving early collections and account management across three portfolio segments: conventional conforming, Option ARM and non‑agency loans.

FICO validated the new FICO 8 Mortgage Score against the existing FICO Score using Swap Set analysis plus KS and Divergence measures, finding materially stronger predictive power that enables more targeted interventions. Results showed potential annual loss avoidance ranging roughly $2M (conventional) to $31M (Option ARM) and $6.7M (non‑agency), plus divergence lifts of 23.9%–51.5% and KS lifts of 8.5%–11.3%, allowing servicers to reduce foreclosures and allocate resources more effectively.