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FHFA Secretary Bill Pulte vowed to protect consumers from rising credit reporting fees from Equifax, Experian and TransUnion, as mortgage lenders worry about large price increases. The Mortgage Bankers Association is advocating for the elimination of triple credit reporting in favor of a single credit scoring system, with the goal of reducing costs and increasing competition among credit bureaus. Although Mr. Pulte has expressed dissatisfaction with credit bureau pricing, he has maintained the current tri-merge reporting requirements for Fannie and Freddie loans and has not expressed support for the single-score solution proposed by MBA. Credit bureaus blame the fee increases primarily on Fair Isaac (FICO), but Fair Isaac attributes the cost to credit bureau markups. Adoption of new FICO 10T and VantageScore 4.0 models by Fannie and Freddie is pending.
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FHFA board member Bill Pulte’s tweet hurt the stock prices of Equifax, Experian, and TransUnion as the MBA renews its call for the repeal of tri-merge reporting.
A warning from the head of federal regulators at Fannie Mae and Freddie Mac that he would “protect American consumers” from fee hikes by credit reporting companies Equifax, Experian and TransUnion caught the attention of investors in publicly traded companies on Tuesday.
But while Federal Housing Finance Agency Commissioner Bill Pulte appears to share mortgage lenders’ concerns about rising prices, he has not indicated any intention to consider a solution being pushed by industry groups: eliminating “tri-merge” reporting and allowing lenders submitting loans to Fannie and Freddie to generate a single credit score for each borrower instead of three.
The Mortgage Bankers Association last summer endorsed the move to a “single file/single score” approach, saying it’s a system that works well in most other consumer lending markets, including home equity and auto loans.
MBA President Bob Bruksmit reiterated the need for the policy change in a Dec. 12 letter to Prut.
bob bruksmit
“The current … requirement to obtain a report from each of the three credit reporting agencies creates a situation where there is no competition between agencies for the product,” Burksmit complained. “As expected, in a market with only three providers and an obligation to purchase reports from all three, the industry will be exposed to higher prices as there is no alternative or way to counter price pressures.”
Burksmit said financial institutions expect credit report prices to increase by an average of 40% to 50% in 2026, which is the fourth consecutive year of “dramatic price increases.”
“Lenders must cover these costs for all applicants, even for loans that don’t close, and pass them on to the borrower as part of the origination process, adding hundreds of dollars to the borrower’s closing costs,” Broeksmit said.
In a Jan. 5 post on social media platform
Bill Pelt
“I don’t understand what the credit bureaus are doing with pricing. They’re asking for a lot of scrutiny, and it’s only getting more intense by the day,” Pulte wrote.
“We have been in contact with CEOs of companies about related issues, but they are not listening,” Pruitt said.
The Consumer Data Industry Association (CDIA), which represents credit reporting agencies, pointed to a statement issued by Inman in November defending the TriMerge report and blaming Fair Isaac, the creator of the FICO score, for the price hikes.
“We need more data, not less, to protect lenders and taxpayers and open more opportunities for borrowers,” the CDIA argues. “The solution to lowering costs for consumers is not less data, but more choice in the mortgage scoring market.”
Equifax, Experian, and TransUnion formed a joint venture, VantageScore, to compete against Fair Isaac. Credit bureaus maintain files that track a consumer’s debt and repayment history, and that information is fed into credit scoring algorithms like FICO and VantageScore to generate a credit score.
As part of its plan to phase out the FICO Classic algorithm in 2025, FHFA had proposed requiring lenders to evaluate borrowers using two more comprehensive algorithms: FICO Score 10T and VantageScore 4.0. As part of the switch, lenders can now derive credit scores using data from only two credit reporting agencies (“double merge” reporting).
However, FHFA delayed the implementation schedule for that plan last year, and lenders are still waiting for historical data on FICO scores of 10T that would allow them to update the process.
When Mr. Pulte ordered Mr. Fannie and Mr. Freddie to begin accepting VantageScore 4.0 in July (an order that is still being implemented), he said lenders would still need to obtain tri-merge reports.
Fair Isaac announced on Dec. 1 that it has agreed to release historical FICO Score 10T data to Fannie and Freddie, potentially setting the stage for VantageScore 4.0 to take on FICO Score 10T later this year. Supporters say the new score is more comprehensive, taking into account trending credit data and additional information such as rent, utility and telecom payments to help more people qualify for loans.
But for now, Fannie and Freddie continue to require lenders to be scored using the FICO Classic algorithm, which uses data from Equifax, Experian and TransUnion to generate three credit scores.
“The price increases occurring in the industry are primarily the result of FICO’s price increases and actions,” CDIA asserts.
Meanwhile, Fair Isaac has taken responsibility for the price increases charged by credit bureaus and rolled out a new direct licensing program that allows resellers of TriMerge credit reports to generate their own credit scores.
Participating trimerge resellers, including Cotality (formerly CoreLogic) and Ascend subsidiaries Advantage Credit and Partners Credit, are still required to obtain credit reports from each of the three major credit reporting agencies. But they are paying Fair Isaac directly for the right to use the FICO algorithm.
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