Adverse selection and Fico scores have become buzz phrases in the mortgage industry in recent weeks. Oddly, these esoteric terms are embedded in one of the most vitriolic disputes to surface in the industry in recent memory.

The dispute first broke into public view when Ralph Mozilo, executive vice president of Countywide Funding Corp., Pasadena, Calif., said to American Banker that Freddie Mac was using credit scoring "almost as a weapon" to request that Countrywide buy back loans it had already sold to Freddie.

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