Fair Isaac said it would hold its wholesale mortgage price at $10 for lenders who enroll in a new program. The stock was down about 9% just before noon, then broke lower as the head of the housing regulator promised "more action this week."
Fair Isaac told mortgage lenders who enroll in a new program that it would not raise their price next year. Its shares fell 13% on Monday anyway, and the decline came in two distinct parts.
FICO closed at $708.07, down 13.15% from Friday's $815.31, on about 2.46 million shares, more than six times Friday's volume. The credit bureaus Equifax and TransUnion fell 2.08% and 2.28%, and the S&P 500 rose 0.7%. The stock is now about 62% below its 52-week high of $1,858.91.
The price that didn't change
After the close on Friday, FICO said it will hold its wholesale mortgage score price at $10 for lenders and brokers enrolled in its Preferred Program, for a bundle of the Classic FICO Score and the newer FICO Score 10T. Chief Executive Will Lansing said the move ensures lenders "have access to the trusted and predictive tools they need to assess risk with confidence."
The flat price comes with a condition. According to notes from Mizuho and UBS cited by HousingWire, enrolled lenders commit to pulling a FICO score on every application. Mizuho said the program means lenders "pay for a FICO score on every pull, soft and hard," so ordering a cheaper rival score first no longer saves them money. FICO has not published the full program terms.
That makes the announcement less a price freeze than a trade: a year without a price increase in exchange for guaranteed volume at the lenders who sign up.
Two legs down
Brokers moved before the open on Monday. Wells Fargo downgraded the stock to Equal Weight and cut its target to $735 from $800. BMO cut its target to $897 from $1,150, Mizuho to $986 from $1,063 and UBS to $942 from $1,100. Autonomous Research lowered its target to $560 from $600.
Just before noon Eastern, FICO was down about 8.8%. It then broke sharply lower, reaching $671.51 shortly before 1 p.m., a further drop of nearly 10%. It recovered to close at $708.07.
The second decline coincided with two posts on X by Bill Pulte, director of the Federal Housing Finance Agency, minutes apart. In the first, he wrote that the agency is "taking more action this week to ensure competition is real and not fake, or manipulated." Minutes later he wrote that "abusive monopolies will not be allowed to take advantage of consumers anywhere in the mortgage market." The FHFA has not said what action it plans.
The gap with VantageScore
The competitive math is stark. VantageScore 4.0, the rival score, costs roughly 99 cents per mortgage pull, about a tenth of FICO's bundle price. TransUnion has extended its 99-cent mortgage pricing for VantageScore 4.0 through 2028, and the Federal Housing Administration begins accepting it on Jan. 1, 2027.
FICO more than doubled its mortgage score price to $10 last year, according to Dow Jones. Mizuho said it had previously modeled about 5% price growth for 2027 and now assumes none.
Two readings
One reading is that this is a smart defensive move. FICO keeps a price ten times its rival's, locks in usage at enrolled lenders before VantageScore spreads, and, as UBS noted, the contracts do not need approval from the FHFA or the mortgage agencies. BMO and Mizuho kept Outperform ratings.
The other is that pricing power has peaked. A company that doubled its price last year is now holding it flat for enrolled lenders, Mizuho has removed future increases from its model, and the regulator is promising action within days. One reseller executive told HousingWire the program could raise costs for lenders, who may end up paying for both scores.
What to watch
Any FHFA action this week, FICO's disclosure of program terms and enrollment, its fiscal fourth-quarter results, expected on Nov. 4, and the FHA's adoption of VantageScore 4.0 in January.