Fair Isaac Corporation Faces Investor Investigation Over Credit Score Changes
Law firm Levi & Korsinsky has initiated an investigation into Fair Isaac Corporation (FICO) following changes announced by the Federal Housing Finance Agency that could allow a competing credit scoring model into mortgage underwriting.
Fair Isaac Corporation (FICO) is now the subject of an investigation by law firm Levi & Korsinsky. The probe follows an announcement by the Federal Housing Finance Agency (FHFA) that could permit a rival credit scoring model to be used in mortgage underwriting. FICO's stock experienced a significant drop of over 20%, or more than $172 per share, immediately after the FHFA's announcement.
The FHFA stated its intention to simplify mortgage pricing and potentially open up underwriting to competing scores. Shortly thereafter, Rocket Mortgage announced its plan to adopt VantageScore 4.0 as its preferred credit scoring model. This announcement came despite FICO's previous assertions that it did not anticipate losing volume to Vantage in the current fiscal year.
Levi & Korsinsky is examining whether FICO shareholders have grounds to recover losses under federal securities laws. The firm is encouraging FICO shareholders who experienced financial losses due to the stock's decline to contact them for a free review of their potential claims.
The investigation will assess if FICO made materially false or misleading statements regarding regulatory and competitive risks to its mortgage credit scoring business. Investors who purchased FICO stock and suffered losses may be eligible to participate, regardless of whether they still hold the shares.