Credit Scoring Controversy Brewing Among Industry Stakeholders
March 16, 2018
A battle is brewing over whether Fannie Mae and Freddie Mac should allow lenders to use alternatives to the ubiquitous FICO credit score. Some industry participants argue that the current credit scoring system works well. Others complain that the Federal Housing Finance Agency and the GSEs should be doing more to encourage alternatives to a system some deem outdated. The FHFA has been evaluating alternative credit scoring models over the past year and charged the GSEs with closely examining potential changes in how they use credit scores. Right now Fannie and Freddie rely exclusively on the Classic FICO score.
The creation of a U.S. sovereign wealth fund could grease the skids for an end to the conservatorships of Fannie Mae and Freddie Mac.
News Tailored to Your Needs
Get Focused Coverage
Inside Mortgage Finance's newsletters break the mortgage market down so you get the news and data you need most, whether it's total industry coverage or just the news related to securitization, regulation, profits or other specific topics.