| Entities | Federal Home Loan Mortgage Corporation (Freddie Mac) (7) |
| Topics and Issues | Credit scores (37) |
FHFA has announced that it is holding a Public Listening Session on Credit Score Models on March 1, 2022. According to the announcement:
FHFA is hosting a public listening session on the potential transition to a new credit score(s), pursuant to the Validation and Approval of Credit Score Models Rule.
FHFA and the Enterprises are currently evaluating credit score models and FHFA is seeking feedback from stakeholders and the public at large to assist in this process. The purpose of the listening session is to provide an update on this process and give interested parties an opportunity to provide feedback on the following questions:
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- Do you have a recommendation on which option FHFA should adopt, or if FHFA should adopt an option other than the ones described below? Under each of the following options, the Enterprises would maintain their current policies permitting evaluation of loans where no credit score is available for a borrower.
- Option 1 – Maintain a Single Score Requirement: The Enterprises would continue to require delivery of a single score, if available for each borrower on every loan. The single score could be any of the credit score models for which an application was submitted during the Enterprise solicitation process in 2020.
- Option 2 – Require Multiple Scores: The Enterprises would require delivery of multiple scores, if available, on every loan. This would include each of the credit scores that would be approved for use.
- Option 3 – Lender Choice: The Enterprises would allow lenders to deliver loans with any score that has been approved for use. This could be implemented to permit lender choice on individual loans, or it could require lenders to choose a score to use for a period of time.
- Option 4 – Waterfall: The Enterprises would allow delivery of multiple scores through a waterfall approach that would establish a primary credit score and secondary credit score. Where a borrower who did not have the primary credit score, a lender would have the option to provide the secondary credit score.
- What are the fair lending and access to credit impacts of these credit score options? Please discuss any relevant considerations.
- How significant are the operational considerations for transitioning to a new credit score or credit scores? Please discuss any comparison of operational considerations between a single score (option 1) and multiple score options (options 2-4) using a high, medium, low scale for complexity and costs.
- Would the credit score options impact consumers differently (positive or negative)?
- Do you have additional concerns with or insights to share on the Enterprises updating their credit score requirements?
- Do you have a recommendation on which option FHFA should adopt, or if FHFA should adopt an option other than the ones described below? Under each of the following options, the Enterprises would maintain their current policies permitting evaluation of loans where no credit score is available for a borrower.
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