GSE ’scorecard’ sees credit score reviews completed in 2016

December 28, 2015

The Federal Housing Finance Agency’s December “scorecard” report for Fannie Mae, Freddie Mac and the common securitization initiative anticipates the agency in 2016 will complete its assessment of the enterprises’ use of credit scores for underwriting, pricing and investor disclosures.

Fannie Mae and Freddie Mac are currently limited to using FICO credit scores, but FHFA this year has been reviewing the credit scoring models of FICO as well as VantageScore. The article notes that most lenders today use FICO 4 or FICO 5 in connection with loans delivered to Fannie and Freddie using automated underwriting.

Earlier this month, Rep. Ed Royce, D-Calif., and Tom Sewell, D-Ala., introduced a bill, H.R. 4211, that would require the GSEs to consider other scoring models. Potential homebuyers without a FICO score or with one below 620 are ineligible for a mortgage that can be sold to Fannie or Freddie.

Read the original article here.