NAR Joins Push for Alternative Credit Scoring
August 30, 2017
A group of housing and mortgage trade associations, including the National Association of REALTORS®, is urging the Federal Housing Finance Agency to expand its use of alternative credit scoring models to offer greater access to mortgage credit for responsible borrowers. The coalition, called America’s Homeowners Alliance, is stressing that competition in credit scoring models could improve access to affordable credit.
FHFA Director Mel Watt recently said that changes to mortgage financing giants Fannie Mae and Freddie Mac’s credit score models would not occur until at least 2019. The coalition argues that is too long to wait, noting the GSEs have already completed "nearly three full years of internal review and assessment" on the matter.
"FHFA's effort to expand the use of alternative credit scoring models is a critical component to reversing the steady decline in homeownership particularly for low- and moderate-income as well as minority consumers," according to a letter from the trade groups to Watt. "We were dismayed to hear about this significant push back of the timeline, and we would like to request a meeting with you to explore the factors contributing to the delayed implementation."
There are 15 trade associations who are part of America’s Homeowners Alliance. Besides NAR, the coalition includes the Mortgage Bankers Association, the National Association of Home Builders, the Consumer Federation of America, the Asian Real Estate Association of America, the National Association of Hispanic Real Estate Professionals, and others.
Source: “Industry Groups Press FHFA on Alternative Credit Scoring,” National Mortgage Professionals (Aug. 29, 2017)
Updated: June 22, 2018