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:
Watt explained why the decision to move to alternative credit scoring models is complex. He used a series of questions to illustrate his point:
Watt also said the announcement will be made next year. FHFA will also set an implementation date. However, implementation of the new system will be no sooner than the second half of 2019.