The Community Home Lenders of America (CHLA) has joined the chorus of mortgage industry voices calling for reforms related to the rising costs of FICO royalties charged for mortgage-related credit pulls.
In a letter sent Tuesday to Bill Pulte, director of the Federal Housing Finance Agency (FHFA), the CHLA commended Pulte’s recent comments directed toward Fair Isaac Corp., the company behind the FICO score, a measure of consumer credit risk. Pulte wrote on social media this week that he is “not happy with FICO” and that “American consumers must be respected.”
“Because the U.S. government, and specifically FHFA and Fannie Mae and Freddie [Mac], not only require a credit score for mortgage production, but also cite Fair Isaac by name in the relevant guidelines, Fair Isaac has been able to increase mortgage credit scores prices by 700% in the last 30 months and not lose one iota of market share,” the CHLA letter stated. “This harms American families already dealing with price inflation generally and difficult housing conditions in particular.”
Lenders who sell loans to Fannie or Freddie are currently required to obtain three credit reports for each borrower on a loan. It is a process known as the Classic FICO credit score model, or the “tri-merge” model.
Under a proposed “bi-merge” model — which was originally set for implementation by Fannie and Freddie during the fourth quarter of 2025 but has been delayed to a “to-be-determined date” — lenders who sell loans to Fannie or Freddie will be required to pull FICO 10T and VantageScore 4.0 reports from two different credit bureaus.
On Tuesday, Pulte said on social media that he may announce FICO-related decisions in the next one to three weeks.
The CHLA letter maintained that without some form of intervention, “we expect even more credit score price hikes going forward.” The nonprofit association of small- and mid-sized community-based mortgage lenders also suggested that Fannie and Freddie remove specific references to Fair Issac in their credit score guidelines.
“Naming one company explicitly sends the wrong signal to the marketplace and inhibits creative thinking on how to innovate here to keep costs lower,” the association said.
In a separate press release, CHLA Executive Director Scott Olson also praised Pulte’s willingness to stand up to FICO’s price increases.
“CHLA commends FHFA Director Pulte for calling out excessive FICO credit score price hikes,” Olson said. “Homebuyers thrive when competition is maximized and consumers have more choices.”
