“Mortgage finance is the liberal arts of mortgage lending,” he said. “It’s all about a narrative… Buying a house is such an emotional decision.”
For brokers, this means understanding that financial decisions don’t happen in a vacuum. “You have to approach [underserved clients] in a certain way in order to benefit them,” Moye said. “Education for the loan officers is important… You have to understand these issues.”
Rethinking risk: Alternate credit and residual income models
Many borrowers, especially from minority communities, don’t fit neatly into the traditional FICO box. “Having a high credit score might mean that you have a lot of debt,” Moye said. “And that doesn’t necessarily mean you’re financially responsible.”
He points to recent innovations that attempt to correct these blind spots. FHA now allows rent history to be factored into underwriting, and tools like Experian Boost can pull in streaming service or utility payments to help create a fuller financial picture. Moye also highlights how medical debt, often included in credit reports, has little correlation with whether someone will pay their mortgage on time.
Beyond credit scores, he encourages lenders to rethink how they assess debt burden. “VA loans don’t use DTI the same way, they look at residual income. And they perform really well,” he said. “Maybe Fannie and Freddie should think about adopting that model.”
