Mortgage insurers face larger safety net rule for VantageScore 4.0

Mortgage insurers will be required to keep a larger safety net for mortgages originated using VantageScore 4.0 than for comparable loans using Classic FICO, according to new guidance from the government-sponsored enterprises (GSEs). In late July, Fannie Mae and Freddie Mac published a new grid for their Private Mortgage Insurer Eligibility Requirements (PMIERs) that, for the first time, includes VantageScore 4.0 credit scores. The change comes as the mortgage industry transitions away from Classic FICO and toward newer credit-scoring models. In a statement sent to HousingWire, a VantageScore spokesperson said that it’s not the company’s policy to comment on Federal Housing Finance Agency (FHFA) or GSE pricing. “We applaud Director Pulte and Fannie Mae and Freddie Mac Leadership Teams for swiftly and effectively modernizing credit scoring in the conventional-conforming mortgage market to allow competition, delivering significant savings for mortgage lenders while simultaneously improving access to mortgage finance and enhancing safety and soundness of the mortgage finance system,” the spokesperson added. The guidance, issued under the oversight of the FHFA, sets percentage factors u...