The annual progress report on the Fannie Mae and Freddie Mac conservatorships reiterated that a new credit score model will likely not be operational until after the implementation of a new Single Security Initiative.
A late addition to regulatory relief legislation would direct the Federal Housing Finance Agency to review credit-scoring alternatives, but some say the provision is redundant.
The Federal Housing Finance Agency said Friday it will give commenters more time to weigh in on a potential update to the credit scoring requirements for Fannie Mae and Freddie Mac.
The two government-sponsored enterprises have relied on the “classic” FICO credit scoring model for the past 12 years. But the Federal Housing Finance Agency is weighing whether the GSEs should upgrade to more recent scoring alternatives.
Efforts to persuade regulators to allow Fannie Mae and Freddie Mac to use alternative credit scores would stifle competition between the credit bureaus and FICO and do little to expand access to credit, according to industry analyst Chris Whalen.
