Federal Housing Finance Agency Considering Alternative To FICO

Federal Housing Finance Agency Says It Wants An Alternative To the FICO Credit Scoring System

Federal Housing Finance Agency Director Mel Watt is looking at an alternative to the FICO credit scoring system. Yet, he told the Mortgage Bankers Association not to hold their breath waiting for Fannie Mae and Freddie Mac. 

Watt said that the Federal Housing Finance Agency is seriously considering moving beyond using only FICO credit scores. 

Watt told the Mortgage Bankers:

I initially thought this decision would be relatively easy to make. After all, we all believe that competition is good. However, the more we looked into this issue, the more complicated it became.

Watt explained why the decision to move to alternative credit scoring models is complex. He used a series of questions to illustrate his point:

Read more at MFI-Miami