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5 January 2025 January 2025 » M T E C H VANTAGESCORE'S RISKRATIO TO HELP LENDERS IDENTIFY TRENDS IN CREDIT RISK V antageScore has revealed ma- jor improvements to RiskRatio, their predictive digital tool. The most recent improvements provide RiskRatio more predictive power. It was created to assist lenders, financial institutions, and other users of credit scoring models in comprehending and evaluating the default risk across vari- ous VantageScore credit score ranges. "Eight of the top 10 U.S. lending institutions use VantageScore's inno- vative digital tools to make faster, more informed decisions," said Susan Fahy, EVP and Chief Digital Officer at Vanta- geScore. "With RiskRatio's new features, lenders can gain unparalleled insight into consumer credit trends, enabling them to act swiftly and strategically in response." Key enhancements to RiskRatio include: • Granular Delinquency Insights Expanded delinquency catego- ries—30+ Days Past Due (DPD), 60+ DPD, 120+ DPD, ChargeOff + Bankruptcy, and Bankruptcy—offer more precise identification of credit risk trends. Identifying these delin- quency trends sooner allows lenders to provide targeted interventions to borrowers earlier. • Enhanced Risk Segmentation by Product Deeper insights into borrower behav- ior across product types are provided by the addition of mortgage product segmentation, which covers First Mortgages, Home Equity Lines of Credit (HELOCs), and Home Equity Loans (HELOANs). When the market changes, the extra segmentation ca- pability enables lenders to promptly modify their lending rules. • Shorter Performance Windows for Emerging Trends RiskRatio now offers 6-month and 12-month performance windows in addition to the current 24-month performance window. By providing insight into the possible effects of modifications to lending rules or economic events, these extra choices assist lenders in identifying changes in delinquency rates more rapidly. BLUE SAGE SOLUTIONS DIGITAL LENDING PLATFORM FULLY INTEGRATES FANNIE MAE'S INCOME CALCULATOR T he first loan origination system (LOS) to fully integrate Fannie Mae's Income Calculator is Blue Sage Solutions, the company re- vealed. For borrowers who earn income from self-employment or business ownership, this API-enabled interface, which is started straight from the LOS, simplifies the income calculation process, allowing lenders to approve mortgages more quickly and accurately. Fannie Mae provides rep and war- rant relief on the income computations produced by their tool, which is one of the main advantages of this integration. By lowering the possibility of future loan buybacks brought on by inaccurate income calculations, lenders can know that the qualifying income level given by Fannie Mae's Income Calculator is accurate. Lenders may enhance pro- cessing speeds, lower compliance risk, and provide a more seamless experi- ence for borrowers by incorporating this capability straight into Blue Sage's Digital Lending Platform. "Fannie Mae strives to make the origination process more efficient and to help lenders avoid issues that may potentially arise in downstream loan quality reviews," said Mark Fisher, VP of Single-Family Credit Risk Solutions at Fannie Mae. "Working with tech- nology service providers will continue to make Income Calculator widely available, assisting lenders to avoid these pain points to accurately calculate income for self-employed borrowers." The intricacy of business structures and nontraditional revenue sources has historically made assessing self-employ- ment income a laborious procedure. By automating the computation of income from personal tax returns, company tax returns, and other tax documents, Fannie Mae's Income Calculator tackles these issues. Allowable add-backs that are not included in transcripts of 4506- C tax returns can also be advantageous to lenders since they optimize borrower income and may reduce DTI ratios. "This represents a major leap forward in how lenders handle loans involving self-employed borrowers," said Carmine Cacciavillani, Founder and President of Blue Sage. "Our inte- gration not only speeds up the income calculation process but does so with greater accuracy, resulting in fewer de- fects. For lenders, this means less time spent on manual reviews and more time delivering a fast, reliable, and enjoyable customer experience to their borrow- ers. We're proud to be the first LOS to bring a fully integrated capability to the market."