ECRID Offers Federal Housing Finance Agency (FHFA) Credit & Lending Platform to Immediately Assist Low-Credit and No-Credit Home Buyers, and Others
BY GlobeNewswire | AGENCY | 11/21/22 02:01 PM ESTStuart, FL, Nov. 21, 2022 (GLOBE NEWSWIRE) -- Ecrid, Inc.
A New Measure of Credit ?
The traditional FICO credit score that Fannie Mae and Freddie Mac rely on to approve home buyers will soon be a thing of the past. After about eight years of working toward a better solution, the Federal Housing Finance Agency (FHFA) announced a new model that will make it possible for a wider range of borrowers to qualify for home loans. While it could take a few years to implement, the dual-score model is designed to expand credit access and make it easier for home buyers with ?non-traditional credit? to get mortgage-qualified.
Give Credit Where Credit is Due
The government-sponsored enterprises Fannie Mae and Freddie Mac are the safety net of the mortgage industry and guarantee the majority of U.S. home loans. For the last 20 years, they used the classic FICO score to help judge the creditworthiness of loan applicants. Traditional FICO had some ?blind spots.? Among other things, it did not include the entire picture of a person?s financial profile. Plenty of would-be home buyers have been denied in the past, simply because they didn?t demonstrate the right type of credit history to qualify under FICO?s model. FHFA?s targeted adjustments... are well-timed and will improve access to credit for low- and moderate-income households, first-time buyers, and minority buyers.? ?Bob Broeksmit, President and CEO of the Mortgage Bankers Association
ECRID
There?s a new publicly traded Credit Bureau ECRID with a lending component that builds on and augments what FHFA is attempting to do with the changes it is making to the traditional FICO. The ECRID Credit Report provides an expansive snapshot of ?creditworthiness and will yield a more inclusive pool of borrowers.? All credit bureaus should take notice. The ECRID Business-to-Customer (B2C) model operates with transactions between ECRID
For the above and other reasons, while we applaud aspects of the modifications proposed to the current credit and lending systems by FHFA, ECRID
The new credit score model ? which will use both FICO 10T and VantageScore 4.0 ? should use the ECRID Score as well when we account for previously uncaptured payment histories like rent, utilities, and telecommunication bills upon which ECRID
What This Means For The Home Buyer ?
This should be a positive change for home buyers and open credit access to a wider range of people, especially renters. The change in credit scoring will be more equitable, accurate and inclusive for borrowers. Those who have typically been overlooked in the past because they had ?thin? credit files will get fairer judgment when it?s time for them to get a mortgage. ?Given the ongoing affordability challenges facing homebuyers, FHFA?s targeted adjustments to the GSEs? pricing framework are well-timed and will improve access to credit for low- and moderate-income households, first-time buyers, and minority buyers,? said Bob Broeksmit. ?The announced updates on credit scoring models should help broaden the scope of eligible borrowers and expand access to homeownership for underserved communities,? he continued.
Apply Sooner Rather Than Later
This change should lower the barrier to homeownership for many. The slow pace of the rollout, an expected two years, will delay justice longer than necessary. But this is not a case in which justice delayed needs to be justice denied.? ECRID
Contact:
Maria Schuberth
(561) 722-8620
ECRID.com
(800) 380-9096
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Source: Ecrid, Inc.