Underwriting

The program helped more than 23,000 consumers establish credit scores in its first year through partnerships with three fintechs, all of which were chosen to renew their participation.

Even though it is less than two years since it allowed Fannie Mae and Freddie Mac to accept such valuations, it is difficult to evaluate their effectiveness without such examinations.

Questions about how it will be implemented and whether the rest of the market will follow the agency's lead make the expense involved difficult to estimate.

While the latest change applies specifically to COVID forbearances, the agency is looking at more options for alternatives that can be offered on a regular basis, Director Sandra Thompson said.

Overall rate locks dropped 1.5% on a month-to-month basis; the drop in purchase volume was higher at 1.9%, Black Knight said.

The Home Loan banks are failing to serve huge numbers of Americans because of their reliance on outdated credit scoring models.

Between 2004 and 2021, the share of originations under $150,000 has declined by 70%, forcing a growing number of consumers to seek alternative forms of financing instead of getting a mortgage, a Pew Charitable Trusts report found.

The move cancels the fee Fannie Mae and Freddie Mac would have imposed on certain loans for which the borrower's total debt exceeded 40%.

The shift opens the door for regional banks to increase their aggregation activities, analysts said.

The Federal Housing Finance Agency said it would heed the recommendation from a report by its Office of the Inspector General released this week.