UWM CEO sees "no end in sight" to credit report cost hikes

United Wholesale Mortgage's CEO Mat Ishbia called for brokers to adapt in order to navigate the new normal of rising credit report costs.

In a recent video, the executive mentioned that Fair Housing Corp. will push up wholesale royalty costs for credit scores by over 40%, which in turn will push credit report costs.

"I do not see an end in sight to this right now," he said. "So make sure you understand that, understand the new world we live in and continue to dominate even with higher credit report costs."

He noted that title waivers and appraisal waivers, unlike credit reports, have actually dropped in price. 

"Understand how that impacts you and borrowers," Ishbia said. "What are ways you continue to save costs? This expense impacts your bottom line…"

Criticism of FICO and credit card report costs has intensified in recent months, with some mortgage industry figures calling the increases "price gouging."

FICO's wholesale royalty will rise to $4.95 per score for mortgage originations in 2025. While slightly below the $5 forecast by some analysts, the hike marks a significant increase from the current cost of $3.25 for a mortgage credit score. The scheduled price hike will inevitably push up costs for tri-merge reports issued by the three credit bureaus.

Ishbia in his video also addressed the future refinance landscape. 

He cited a recent study by Transunion, which found that four out of five borrowers who were surveyed plan to refinance within the next 12 months. About 80% of the 1,000 respondents said their mortgage payments are straining their finances. 

"What people are saying is between 50 basis points and 75 base points is more than enough for them to refinance," the wholesale lender's CEO said. "So a borrower at 7.5% going to 7% is a refinance opportunity…so understand the overall economy, consumers are calling and this survey locks in the fact that people will refinance regardless of whether rates go down to 4% or 5%." Ishbia also said that despite reports that home construction has entered a slowdown, housing inventory is ample.

"This is what people like to talk about — the negative things," he said. " In the market there are more houses for sale than before. The mainstream negative media likes to talk about things that are always negative, but the reality is there are more houses for sale right now, more buyers out there and the opportunity is there." 

Despite signs that the tides are turning for housing supply, the nation has a shortage of approximately 1.5 million homes, the National Association of Home Builders predicts.

The lack of building, according to NAHB Senior Vice President and Chief Economist Rob Dietz, stems from 5 "L's" for builders: a lack of labor; and a lack of lots to build on; lending; lumber; and legal and regulatory issues.