Sandra Thompson flags mortgage risk in FHFA’s unified score pricing

Former Federal Housing Finance Agency (FHFA) Director Sandra Thompson is raising concerns that the current credit score modernization strategy could misprice risk by placing different credit scoring models under the same loan pricing grids. “One of the things that is the most important aspect of credit score modernization is getting the risk pricing of the loans correctly,” Thompson said during a Housing Finance Strategies webinar on Tuesday. “A 740 classic FICO isn’t necessarily the same risk as a 740 VantageScore loan. Different models can rank and measure borrowers differently, and we just need to know whether the same numerical score warrants the same price.” Thompson joined FHFA in 2021 after a 23-year tenure at the Federal Deposit Insurance Corp. She left on Jan. 19, 2025, a day before the inauguration of President Donald Trump. Under her leadership, FHFA began studying new credit models and announced plans to move away from reliance on the Classic FICO model and from the traditional tri-merge requirement, but implementation was delayed. Under Director Bill Pulte, FHFA has approved the use of VantageScore 4.0 for all single-family loans sold to Fannie Mae and Freddie Mac and ...