Groups press FHFA to slow credit score overhaul amid rising delinquencies
A coalition of 35 taxpayer, consumer and senior advocacy groups has pressed Federal Housing Finance Agency (FHFA) director Bill Pulte and the Trump administration to go slow on planned mortgage credit score changes, warning that missteps could raise systemic risk in a $12 trillion market and set the stage for another bailout.
In a January 26 letter, the signatories said they supported efforts "to responsibly increase homeownership in America" but argued that access has to be matched with borrower readiness and investor protection.
"Owning a home is to millions of families at the heart of the American Dream," they wrote. "They should be able to fulfill that aspiration when they are financially prepared to do so."
Coalition draws direct line to 2008
The groups framed the debate squarely through the lens of the last crisis. "Too often in the past, families not yet ready to become homeowners have been pushed into it by government regulatory, fiscal, and monetary policies," the letter said.
"The result was the 2008 financial crisis, largely driven by many bad mortgages failing at once."
Those failures, they warned, "triggered a cascade of events that eventually led to multiple taxpayer bailouts." The coalition added: "We are sure you agree that this crisis should never happen again. This risk is particularly acute now, as recent data indicates that mortgage delinquencies are trending upward."
Data from the Mortgage Bankers Association and ICE Mortgage Technology showed national mortgage delinquencies rising off historic lows in 2024 and 2025, with stress concentrated in FHA and VA segments, even as overall rates remained well below pre‑2008 levels.
Three demands on Pulte’s credit score plan
The groups focused on Pulte’s move to let Fannie Mae and Freddie Mac accept competing credit score models in place of the long‑dominant Classic FICO, including VantageScore 4.0.
They urged:
"First," the letter said, "earlier this year, you unveiled a new plan to allow Fannie Mae and Freddie Mac to permit mortgage lenders to choose between the current credit score being used today and new credit score models."
Any innovation, they argued, must address "mortgage lending complexity, the distortion of price signals, and the underlying financial health of Fannie and Freddie."
"Second," they wrote, "as a basic protection for taxpayers, the latest and best versions of these competing credit scores should each be available to lenders at the time you implement your initiative."
Rolling out models on different timelines, they warned, risked higher costs for "taxpayers, lenders and consumers" and could deprive lenders of "the most predictive scores to prevent a repeat of 2008."
"Lastly," the coalition said, validation and approval results for models reviewed under former director Sandra Thompson should be released.
"Unlike the previous Administration, you have made data and information transparent and available at FHFA. Releasing these findings will help expedite implementation of your plan."
Industry already braced for credit score disruption
FHFA under both Thompson and Pulte worked to replace Classic FICO with FICO 10T and VantageScore 4.0 and to move from tri‑merge to bi‑merge reporting, before more recently allowing lenders to use VantageScore 4.0 alongside Classic FICO in GSE lending.
Pulte’s July 2025 decision let Fannie and Freddie accept VantageScore 4.0 without new infrastructure, a move he said would "increase competition to the Credit Score Ecosystem" and "bring down closing costs."
FICO later pushed back, arguing that bureau ownership of VantageScore created "a de facto monopoly" and could ultimately raise costs and risk.
At the same time, US mortgage delinquencies in late 2025 climbed to their highest level in four years, even if some of the spike reflected calendar quirks rather than broad credit deterioration.
The coalition closed by urging "a measured, prudent, deliberate, and widely consulted implementation of new policy in the credit scoring rules surrounding mortgage lending," arguing that such an approach would keep the transition "smooth," foster competition and innovation, "minimize" systemic costs and ensure that "taxpayers are protected."
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