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FHFA Establishes Final Rule On Credit Score Models

FHFA Establishes Final Rule on Credit Score Models

The Federal Housing Finance Agency (FHFA) published a final rule on the verfication and approval of third-party credit score model(s) that can be used by Fannie Mae and Freddie Mac. The rule fulfills the requirements in Section 310 of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act. 

The rule requires a four-phase process for validation and approval of credit score model(s):
  • Solicitation of applications from credit score model developers;
  • Submission and initial review of submitted applications;
  • Credit score assessment; and,
  • Enterprise business assessment.
FHFA Director Mark Calabria stated that “One  of my priorities is to ensure that the American people have a safe and sound path to sustainable homeownership, which requires tools to accurately measure risk. The final rule we are publishing today is an important step toward achieving that goal.” The rule will become effective 60 days after publication in the Federal Register.

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