Royce Applauds Progress on Opening Up GSEs to Multiple Credit Scoring Models

Washington, D.C. – (RealEstateRama) — U.S. Representative Ed Royce (R-Calif.), a senior member of the House Financial Services Committee and leading proponent of housing finance reform, released the following statement on today’s progress report from the Federal Housing Finance Agency (FHFA) indicating future consideration of opening up the GSEs to alternative credit scoring models:

“The current practice of using a single credit scoring model hampers the ability of Fannie and Freddie to mitigate their risk, and places the GSEs on a weaker foundation. The FHFA should be commended for seeking a solution to this problem. Breaking up the credit score monopoly at Fannie and Freddie introduces competition into the credit scoring industry and ultimately decreases the potential for another taxpayer bailout,” said Rep. Royce.

Rep. Royce recently introduced H.R. 4211, the Credit Score Competition Act of 2015, to require the FHFA to develop new underwriting guidelines for Fannie and Freddie and allow consideration of alternative credit scoring models the GSEs currently don’t utilize.

Source: U.S. Representative Ed Royce