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  • FHFA announces validation of FICO 10T and VantageScore 4.0 for GSE use

    Federal Issues

    On October 24, FHFA announced the validation and approval of both the FICO 10T credit score model and the VantageScore 4.0 credit score model for use by Fannie Mae and Freddie Mac (GSEs). The agency also announced that the GSEs will require two credit reports from the national consumer reporting agencies, rather than three. According to the announcement, FHFA expects implementation of FICO 10T and VantageScore 4.0 to be a multiyear effort, but once in place, lenders will be required to deliver both FICO 10T and VantageScore 4.0 credit scores with each loan sold to the GSEs. FHFA noted that FICO 10T and VantageScore 4.0 are more accurate than the classic FICO model because they include payment history for factors like rent, utilities, and telecommunications. FHFA also released a Fact Sheet on the newly approved models, which “will improve accuracy, strengthen access to credit, and enhance safety and soundness.”

    Federal Issues FHFA FICO Credit Scores Consumer Finance GSEs Fannie Mae Freddie Mac Credit Report Consumer Reporting Agency

  • GSEs approve continued use of Classic FICO

    Federal Issues

    On November 10, the FHFA announced that, in accordance with the requirements of the Validation and Approval of Credit Score Models Rule (covered by InfoBytes here), Fannie Mae and Freddie Mac (GSEs) have approved the Classic FICO credit score model for continued use. (See also GSE announcements here and here). The FHFA notes that this approval will allow the GSEs “to continue supporting the mortgage market while assessing more modern credit score models” received in response to a Joint Enterprise Credit Score Solicitation announced in February. The FHFA anticipates that the validation and approval process for the additional credit score models will take an additional year to complete.

    Federal Issues FHFA FICO Fannie Mae Freddie Mac Mortgages

  • Bipartisan Group Of House Members Ask FHFA To Allow Use Of Alternative Credit Scores


    On January 9, Representatives Ed Royce (R-CA), Jim Himes (D-CT), Spencer Bachus (R-AL), and Carolyn Maloney (D-NY) petitioned FHFA Director Mel Watt to expeditiously direct Fannie Mae and Freddie Mac to revise their seller/servicer guidelines to permit the use of credit scores from alternative credit score providers, so long as the scores are “empirically derived and demonstrably and statistically sound.” The lawmakers argue that a move to permit the use of scores other than those offered by FICO would “remove an unfair barrier to entry in the mortgage market” and “encourage the development of more predictive credit scores.”

    Freddie Mac Fannie Mae FHFA U.S. House FICO

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