The Federal Housing Finance Agency is currently reviewing a possible deal with FICO to implement the FICO 10T credit scoring model for mortgages, according to a new post on X by FHFA Director Bill Pulte.
FHFA announced in July that Fannie Mae and Freddie Mac will allow lenders the option to use VantageScore 4.0 while still allowing use of the classic FICO score to assess the creditworthiness of mortgages. The agency said at the time it was also exploring implementation of the newer FICO 10T, which uses trended data that captures consumer behavior dynamics and debt history for the previous 24 months. Pulte announced today that the agency is nearing a deal with FICO on the use of FICO 10T.
“This would be great for consumers and the safety of the mortgage market, to have both FICO 10T Score and VantageScore 4.0,” he said.
In a July letter, the American Bankers Association and three associations said the use of VantageScore and FICO could help achieve the shared goal “of a more efficient, more transparent and more competitive credit scoring system that serves as many creditworthy Americans as possible.” However, they added that many questions remained to be answered about implementation.
“The transition to a competitive market for credit scores raises a number of implementation questions and concerns that the GSEs will need to address before they can take delivery of loans that rely on new scores – including Vantage Score 4.0 and/or FICO 10T – for pricing or eligibility,” the associations said. “Credit score standards are embedded throughout the mortgage ecosystem and the incorporation of Vantage into that ecosystem will require the GSEs to provide lenders, investors and other market participants critical implementation guidance.”
