Fannie Mae (USOTC:FNMA)
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By Andrew Ackerman
WASHINGTON -- One firm's dominance over the credit scores used to vet many U.S. mortgages is getting a shake-up.
Fannie Mae and Freddie Mac, two mortgage-finance firms that back nearly half of U.S. mortgages, will have to consider credit-score alternatives to Fair Isaac Corp.'s FICO score when determining a mortgage applicant's creditworthiness, under a new rule completed on Tuesday by the mortgage-finance giants' federal overseer.
The move by the Federal Housing Finance Agency is seen as a win for VantageScore, a credit-score system by VantageScore Solutions LLC, which is owned by the three large credit-reporting firms: Equifax Inc., TransUnion and Experian PLC.
"One of my priorities is to ensure that the American people have a safe and sound path to sustainable homeownership, which requires tools to accurately measure risk," FHFA Director Mark Calabria said in a written statement. "The final rule we are publishing today is an important step toward achieving that goal."
The measure is required by regulatory rollback legislation signed into law last year.
AnnaMaria Andriotis contributed to this article.
(END) Dow Jones Newswires
August 13, 2019 14:43 ET (18:43 GMT)
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