Agency will focus instead on implementing new law
.jpg)
The Federal Housing Finance Agency will not now make a decision this year on updating the credit score model used by Fannie Mae and Freddie Mac.
There has been a significant amount of consultation with stakeholders including the mortgage industry about how a new model or models might affect access to credit, operations in the mortgage finance industry, and other factors.
The agency was planning to make a decision in 2018 but is instead focusing on implementing Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174) enacted in May (the Act), which requires it to define, through rulemaking, the standards and criteria Freddie and Fannie will use to validate credit score models.
"After careful evaluation, we have determined that proceeding with efforts to reach a decision based on our Conservatorship Scorecard Initiative process and timetable would be duplicative of, and in some respects inconsistent with, the work we are mandated to do under Section 310 of the Act," said FHFA Director Melvin L. Watt. "In light of that, we are communicating to Congress that we are transferring our full efforts to working with the Enterprises to implement the steps required under Section 310. These steps include developing a proposed rule, receiving and evaluating public comment on the proposed rule and issuing a Final Rule to govern the verification of credit score models. Thereafter, we will follow through on the steps required to implement the new Rule."
