The Federal Housing Finance Agency (FHFA) is rolling out more opportunities for the public to engage with it on the transition to updated credit score models and credit report requirements for loans acquired by Fannie Mae and Freddie Mac, also known as the Enterprises.
The engagement will include a series of stakeholder forums as well as listening sessions. It will allow for the identification of a wide variety of issues, opportunities, and challenges related to successful implementation of the new requirements, including potential refinements to the timeline for adoption.
“This engagement process represents the next logical step in our efforts to ensure robust public input as we work towards implementing the new credit score requirements at the Enterprises,” FHFA Director Sandra Thompson said. “We want to hear from market participants and impacted stakeholders to ensure a smooth transition that minimizes costs and complexity.”
In October of last year, FHFA approved the FICO 10T and VantageScore 4.0 credit score models for use by the Enterprises. This followed a lengthy process of reviewing potential updates to the Enterprises’ credit score requirements, as required by statute and regulation. During this time, the Enterprises undertook rigorous testing of the models and both of the newly approved models exceeded the required thresholds for accuracy, reliability, and integrity.
After an implementation process, the Enterprises will require scores from both models, when available, on all single-family loans they acquire.
Also last year, FHFA said the Enterprises would transition from a tri-merge requirement, in which credit reports are required from all three major consumer reporting agencies, to a bi-merge requirement, in which credit reports are required from at least two of these agencies. FHFA expects that this will promote competition in the market while maintaining the information needed to support robust risk management.
Further, FHFA expects that the implementation date for this bi-merge requirement will occur later than the first quarter of 2024, as was initially proposed.
Interested parties who wish to participate in this process should send their name, affiliation, and contact information to CreditScores@fhfa.gov. FHFA expects to hold initial sessions in the coming weeks. Those who wish to participate in the initial sessions should respond by Sept. 25.