Shares of Fair Isaac Corp. (FICO) shares fell sharply Tuesday after Federal Housing Finance Agency Director Bill Pulte announced a change in mortgage pricing, introducing competition for the FICO Score’s long hold on mortgages.
Fair Isaac’s stock was down more than 20% shortly after the open.
On Monday evening, Pulte reported on X that mortgage giants Fannie Mae and Freddie Mac would move to a single pricing schedule that includes VantageScore, a FICO competitor. Fannie and Freddie back about 70% of the mortgage market, and for decades, FICO was the only credit score they accepted for borrowers seeking financing.
“We are simplifying mortgage pricing following feedback from lenders and consumers. Instead of two separate pricing schedules, which makes no sense, Fannie and Freddie are hereby moving to ONE PRICE SCHEDULE with VantageScore joining the existing FICO Classic pricing schedule,” Pulte wrote.
Pulte also shared an announcement from the CEO of Rocket Mortgage (RKT), with the lender stating that it would begin accepting VantageScore as its preferred model.
“The mortgage industry has relied on a single credit scoring model for decades. Competition is healthy, especially when it can lower costs and expand responsible access to homeownership. We did the work, compared the models and chose the one that helped the most qualified customers,” said Jay Bray, CEO of Rocket Mortgage.
VantageScore is a joint venture of the three credit bureaus Equifax (EFX), TransUnion (TRU) and Experian (EXPN.L). These stocks were also down in early trading.
Subscribe to the newsletter Be careful with your money
Click here for the latest personal finance news to help you invest, pay off debt, buy a home, retire and more.
Read the latest financial and business news from Yahoo Finance
Gn bussni
