Using VantageScore 4.0 reduces risk, reduces the overall cost to the ecosystem, and ultimately means more American consumers in homes,” said Silvio Tavares, President and CEO, on Bloomberg’s ‘The Close.’ “Housing is a key driver of the economy and a key driver of affordability, and that is what these decisions deliver.
Tavares shared his insights on the historic decision of the Federal Housing Finance Agency (FHFA) and the Federal Housing Administration (FHA) to implement VantageScore 4.0 for conforming mortgages.
Fannie Mae and Freddie Mac mortgages account for about 50% of the mortgage market, while FHA loans through the Department of Housing and Urban Development (HUD) account for about 20%.
Tavares added: “It’s great news for the American consumer, great news for the mortgage market, and more generally, great news for the economy.”
Tavares also highlighted key aspects that make VantageScore 4.0 credit scores superior to competitors:
The VantageScore credit score is quantitatively and empirically better. It enables the mortgage lender to use more modern credit report data — we call that trended data. It also uses alternative data, including rental payments. This is critical because these datasets enable more accurate risk measurement and improve the ability of mortgage lenders and guarantors, such as government agencies, substantially, enabling them to measure risk more effectively.
To read more on the FHFA and FHA joint announcement, visit: https://vantagescore.com/resources/knowledge-center/fhfa-director-and-hud-secretary-jointly-announce-vantagescore-4-0-implementation-for-fannie-mae-freddie-mac-and-fha
To learn more about VantageScore’s usage in the GSE-conforming mortgage market, visit the VantageScore Mortgage Resource Center or contact us.
