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The Mortgage Bankers Association is calling for more competitive credit score requirements, HousingWire staffer Kelsey Ramirez reports.

In a letter to the Federal Housing Finance Agency, which requested input in December from interested parties on a possible change to its credit scoring models, the MBA President and CEO David Stevens wrote, “Given that any changes to the existing Enterprise requirements would entail operational challenges that bring with them additional costs, it is important to understand what can be gained from such changes.”

The credit score models being analyzed are Classic FICO, FICO 9 and VantageScore 3.0.

There are also several scenarios Fannie Mae and Freddie Mac could use including choosing just one score model out of those mentioned above, requiring both FICO 9 and VantageScore 3.0 on every loans, lender choice on which score to deliver and allowing for the delivery of a primary and secondary credit score.

Here are a few of the points the MBA made in its letter:

  • Any accepted credit scoring models, regardless of provider, should be subject to frequent, rigorous testing of their predictive capacity by FHFA and the GSEs.
  • Competitive forces typically produce better results in the market by stimulating innovation and lowering costs; therefore, changes to the existing requirements, as well as the review process for future changes, should extract the benefits of competition in credit score modeling.
  • Current efforts that are focused on data provided by the national credit reporting agencies, Equifax, Experian and TransUnion, should not displace or otherwise discourage efforts focused on the use of additional data sources, such as telecommunications, rent or utility payments.
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