Fannie, Freddie to Consider Alternatives to FICO Scores--Update
August 13 2019 - 2:58PM
Dow Jones News
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.
(More)
AnnaMaria Andriotis contributed to this article.
(END) Dow Jones Newswires
August 13, 2019 14:43 ET (18:43 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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