New FICO Model May Not Help Home Buyers Anytime Soon

August 23, 2014
Washington Post 
mortgage lending news
Despite the tremendous media buzz surrounding the rollout of FICO's latest credit score -- which lessens the impact of medical debt and treats borrowers with limited histories more fairly -- the new credit rating is not likely to help home buyers in the immediate future.

Although FICO 9 looks good on paper, it will only be effective if lenders adopt it. However, Fannie Mae and Freddie Mac -- which fund the bulk of home loans -- are not expected to pick up the newest version of the score; and, unless they do, major banks and mortgage lenders likely will not, either. Fannie and Freddie currently use FICO models dating between 2004 and 2008 and are only just now exploring whether to adopt the six-year-old FICO 8 score.









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