{"id":113251,"date":"2025-11-11T23:07:07","date_gmt":"2025-11-12T05:07:07","guid":{"rendered":"https:\/\/milesfortis.com\/?p=113251"},"modified":"2025-11-11T23:07:07","modified_gmt":"2025-11-12T05:07:07","slug":"113251","status":"publish","type":"post","link":"https:\/\/milesfortis.com\/?p=113251","title":{"rendered":""},"content":{"rendered":"<p>Don\u2019t worry, unlike what was part of what caused the crash in 2008, I\u2019m sure <em>this time<\/em> around it will work just fine.<br \/>\n<iframe loading=\"lazy\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/1RZVw3no2A4\" title=\"Burning Down The House: What Caused Our Economic Crisis? Bombshell\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<hr \/>\n<p><a href=\"https:\/\/www.housingwire.com\/articles\/fannie-mae-credit-score-update\/\">Fannie Mae removes minimum credit score requirements from DU<\/a>.<\/p>\n<p>The current 620 minimum representative or average median credit score will be removed for new loan casefiles created on or after Nov. 16, 2025<\/p>\n<div><strong>Fannie Mae<\/strong>\u2018s\u00a0<a href=\"https:\/\/archive.is\/o\/ekYgt\/https:\/\/singlefamily.fanniemae.com\/media\/44141\/display\" target=\"_blank\" rel=\"noopener\">November 2025 Selling Guide<\/a>, released on Wednesday, detailed several updates, including expanding Fannie\u2019s Day 1 Certainty offerings to include representation and warranty relief for undisclosed non-mortgage liabilities, expanding the eligibility for the age of credit document exception for single-closing construction loans and removing minimum credit score requirements from Desktop Underwriter (DU).<\/div>\n<div><\/div>\n<div>As a result of the latter update, Fannie Mae will remove minimum credit score requirements for loans submitted through its DU system starting Nov. 16. This means that the current 620 minimum representative or average median credit score will be removed for new loan case files created on or after that date.<\/div>\n<div><\/div>\n<div>\n<div id=\"membership-content\">\n<div>Other related updates will apply to files submitted or resubmitted beginning the weekend of Nov. 15, 2025, an\u00a0<a href=\"https:\/\/archive.is\/o\/ekYgt\/https:\/\/singlefamily.fanniemae.com\/media\/44146\/display\" target=\"_blank\" rel=\"noopener\">announcement<\/a>\u00a0from Fannie Mae said. Instead of applying a minimum score, DU will use its own analysis of borrower risk factors to determine loan eligibility.<\/div>\n<\/div>\n<\/div>\n<div><\/div>\n<p><!--more--><\/p>\n<div>\n<div id=\"membership-content\">\n<div>Fannie Mae also updated requirements for documenting nontraditional credit and homebuyer education. The DU system will notify lenders when they need to establish a nontraditional credit history or require homebuyer education in cases where a borrower has no traditional credit or installment account on record.<\/div>\n<div id=\"mid_article_responsive\"><\/div>\n<div>On Thursday, a spokesperson for Fannie Mae\u2019s regulator, the<strong>\u00a0Federal Housing Finance Agency<\/strong>\u00a0(FHFA), told\u00a0<strong>HousingWire<\/strong>\u00a0in a statement that \u201cnothing in Fannie and Freddie\u2019s underwriting standards have changed. As we move toward competition and beyond accepting only one type of credit score model, language in the guide needs to be tweaked.\u201d<\/div>\n<div><\/div>\n<div>On Friday, FHFA Director Bill Pulte weighed in on the issue on social media.<\/div>\n<div>\u201cOur underwriting standards are the same. As a process matter, to ensure two scores can be used and not just one, we eliminated requirement for\u00a0<strong>FICO<\/strong>\u00a0in the infamous \u2018guide\u2019. Big deal for consumers. Small or nothing deal for underwriting.\u201d<\/div>\n<div><\/div>\n<div>The<strong>\u00a0Community Home Lenders of America<\/strong>\u00a0(CHLA) also issued a statement on Friday in which they supported the Selling Guide updates.<\/div>\n<div>\u201cToday\u2019s action by Director\u00a0Pulte is yet another blow he\u00a0has struck to start to break up the monopoly FICO has had on credit scoring,\u201d said Rob Zimmer, the CHLA\u2019s head of external affairs. \u201cThe winners will be homebuyers and homeowners that\u00a0have experienced massive credit scoring fee hikes in just the past few years.\u201d<\/div>\n<div><\/div>\n<div>\u201cCHLA has long\u00a0advocated for mortgage credit score reform to break down the monopoly pricing power of Fair Isaac (FICO) \u2014 including most recently in a July\u00a0<a href=\"https:\/\/archive.is\/o\/ekYgt\/https:\/\/www.communitylender.org\/wp-content\/uploads\/2025\/07\/FHFADirectorJuly16.pdf\" target=\"_blank\" rel=\"noopener\">Letter<\/a>\u00a0to Director Pulte, where CHLA suggested the action being taken today \u2026 In just a little over three years, FICO has raised the foundational price for a mortgage credit score pull by estimates of over 1000%, costing American families tens of millions of dollars for a product that has not meaningfully kept up the need to reduce the costs of mortgage loan origination.\u201d<\/div>\n<\/div>\n<\/div>\n<p>&nbsp;<\/p>\n<p><span style=\"font-size: 28px; font-weight: 900;\">Opportunities for borrowers with thin credit files<\/span><\/p>\n<div>\n<div id=\"membership-content\">\n<div>Several industry experts took to LinkedIn to explore what the removal of minimum credit score requirements from DU means for the industry.\u00a0<a href=\"https:\/\/archive.is\/o\/ekYgt\/https:\/\/www.housingwire.com\/winner-profile\/2024-vanguard-jon-overfelt\/\" target=\"_blank\" rel=\"noopener\">Jon Overfelt<\/a>, director of sales and owner of\u00a0<strong>American Security Mortgage Corp.<\/strong>, penned a post about the update and shared with HousingWire that the update caught his eye because of how it opens opportunities for \u201cborrowers with thin and no credit files.\u201d<\/div>\n<div><\/div>\n<div>\u201cI also think that [Fannie Mae] is signaling to the credit providers that they have enough borrower data now that other options are coming besides a credit report. Think about it, when you access a borrower\u2019s bank statement, how much data can you validate from that? A lot, you see it all in real time.\u201d<\/div>\n<div>Overfelt\u2019s post garnered mixed comments.\u00a0<a href=\"https:\/\/archive.is\/o\/ekYgt\/https:\/\/www.housingwire.com\/articles\/2020-hw-woman-of-influence-leora-ruzin\/\" target=\"_blank\" rel=\"noopener\">Leora Ruzin<\/a>, a certified mortgage banker, commented that she had \u201cso many questions\u201d about the update, including how lenders will underwrite these loans.<\/div>\n<div><\/div>\n<div>\u201cI have always said there is more to a borrower than their credit score and have been a fan of incorporating alternative criteria to qualify their ability to repay. HOWEVER, this move will bring in lots of \u2018unknowns\u2019 for lenders, and I have deep concerns over how we can ensure every lender is applying the same guidelines and criteria for utilizing alternative trade lines,\u201d Ruzin told HousingWire.<\/div>\n<div><\/div>\n<div>She continued, \u201cAlso, the lack of transparency on this new \u2018model\u2019 or how to price the loans can welcome bad actors into the mix. When it comes to securitization or credit risk transfers, how will these loans affect the overall quality? Does this mean that spec pools for credit score are effectively gone?\u201d<\/div>\n<div>Ruzin also said that she hopes Fannie Mae provides additional guidance before the change is implemented.<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Don\u2019t worry, unlike what was part of what caused the crash in 2008, I\u2019m sure this time around it will work just fine. Fannie Mae removes minimum credit score requirements from DU. The current 620 minimum representative or average median credit score will be removed for new loan casefiles created on or after Nov. 16, &hellip; <a href=\"https:\/\/milesfortis.com\/?p=113251\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,50,82,55],"tags":[],"class_list":["post-113251","post","type-post","status-publish","format-standard","hentry","category-economy","category-goobermint","category-the-more-things-change","category-they-made-a-movie-about-this"],"_links":{"self":[{"href":"https:\/\/milesfortis.com\/index.php?rest_route=\/wp\/v2\/posts\/113251","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/milesfortis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/milesfortis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/milesfortis.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/milesfortis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=113251"}],"version-history":[{"count":1,"href":"https:\/\/milesfortis.com\/index.php?rest_route=\/wp\/v2\/posts\/113251\/revisions"}],"predecessor-version":[{"id":113253,"href":"https:\/\/milesfortis.com\/index.php?rest_route=\/wp\/v2\/posts\/113251\/revisions\/113253"}],"wp:attachment":[{"href":"https:\/\/milesfortis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=113251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/milesfortis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=113251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/milesfortis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=113251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}