Credit score requirements for FHA mortgages have declined steadily this year, but Ellie Mae reports that average FICO scores have not budged in months for borrowers seeking financing in the broader conventional market.
FICO scores averaged 755 in June -- the same as in January -- and were just four points below their average for all of 2013. Average scores remain far above historical norms and represent a high hurdle for many prospective buyers, including first-time, minority, and moderate-income purchasers.
Lenders, however, want to avoid the risk of having to repurchase soured loans -- from big investors such as Fannie Mae and Freddie Mac -- that have subpar scores or underwriting. Federal Housing Finance Agency director Mel Watt has reached out to lenders by asking for advice on where to set some fees on what Fannie Mae and Freddie Mac charge, including those connected with credit scores.