Fannie Mae and Freddie Mac Embrace FICO Rival VantageScore, Shaking Up the Mortgage Market
Fannie Mae and Freddie Mac have been directed by the Federal Housing Finance Agency to approve all lenders to use VantageScore 4.0, a credit score rivaling FICO, in mortgage underwriting, The Wall Street Journal reported. VantageScore was developed by a joint venture of the three major credit bureaus — Equifax, Experian and TransUnion. The Trump administration and lenders say greater competition in credit scoring will expand the pool of qualified borrowers and lower borrowing costs. Rocket Mortgage, the nation's largest mortgage lender, has made VantageScore its preferred score; United Wholesale Mortgage says it will pull both scores and use the higher one; and PennyMac has deployed VantageScore across its businesses.
Analysts and mortgage-bond investors, however, question whether treating the two scoring models as equivalent could let borrowers obtain better pricing without a corresponding reduction in default risk. According to consulting firm Milliman, nearly $4 billion in Fannie- and Freddie-backed mortgages were originated using VantageScore in August, up from $8 million in April. With 30-year mortgage rates at elevated levels, the scoring shift is reshaping the U.S. mortgage market.
Published by GSM · USA (original Chinese edition)
Photo: 美国郊区成片住宅航拍。Derek Jensen（Tysto）摄，公共领域，维基共享资源
