Lender Choice Supported in FHFA Listening Session

March 3, 2022

The Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, hosted a listening session on the subject of establishing creditscore competition in the mortgage market. Silvio Tavares, President & CEO of VantageScore, was invited to address the public forum.

You can read his comments here.

The full listening session is also publicly available. Advance to 1:18:55 where Tavares outlines three key reasons that lenders should have a choice among approved creditscoring model for use:

1- More Financial Inclusion

2- Increased Competition Delivers Innovation and Choice

3- Lower Systemic Risk Due to Use of Alternative Models

News reports characterized wide support among industry stakeholders for giving a lenders a choice:

“Lender choice” of credit scoring urged at FHFA hearing
National Mortgage News
March 2, 2022

Excerpts:

The FHFA has floated four options: Option 1, maintaining the singlescore requirement for each borrower on every loan; Option 2, requiring multiple scores; Option 3, allowing lenders to deliver loans with any approved score; and Option 4, the “Waterfall” approach allowing a primary and secondary score.

“We urge the FHFA to adopt Option 3,” said Silvio Tavares, president and CEO at VantageScore. “It’s the best and only option that enables true competition and that will directly enable more creditworthy consumers to have access to mortgage loans.”

Advocates for fair housing, homeowners and lenders including credit unions and banks endorsed Lender Choice, with a representative from America’s Homeowner Alliance comparing the option to lenders’ freedom to choose in the private mortgage insurance market.