The Federal Housing Finance Agency (FHFA) plans to direct Fannie Mae and Freddie Mac to shift from “tri-merge” to “bi-merge” reports for loan deliveries within weeks, a person familiar with the plans told Bloomberg.
FHFA officials did not immediately respond to HousingWire’s request for comment.
The change, which would alter a core element of mortgage underwriting for loans sold to the government-sponsored enterprises (GSEs), could be announced by FHFA Director Bill Pulte during the Mortgage Bankers Association (MBA) conference in Chicago on Oct. 12, Bloomberg reported.
A bi-merge option was on the table during the Biden administration when the FHFA was run by Sandra Thompson, but the plan was delayed due to implementation challenges. Recently, some players in the industry have defended the use of a single-file option, with the MBA being the most vocal supporter of the idea.
In early September, Pulte took to social media to say the FHFA was “seriously considering” the adoption of a bi-merge credit report.
“Equifax, Experian, and TransUnion have been overcharging Americans for far too long. This will end soon. We are seriously considering bi-merge, and stronger solutions (SAFER and SOUNDER). We will not allow companies to take advantage of American consumers. No more,” Pulte wrote on social media on Thursday.
A tri-merge credit report combines data from the three bureaus. Under the new policy, lenders would be able to pick only two of them. The requirement is expected to take effect one to three months after it is announced, per Bloomberg.
The latest move comes on the heels of Pulte’s decision to allow Fannie and Freddie to use credit scores from VantageScore, a joint venture of Equifax, Experian and TransUnion.
Earlier this week, Pulte said the GSEs would use a single pricing grid that treats VantageScore 4.0 scores as equivalent to Classic FICO scores, reversing earlier GSE grids released just weeks prior that assumed VantageScore overstated borrower creditworthiness by about 20 points versus FICO.
