Fannie Mae and Freddie Mac released the lending data Thursday in response to industry requests for numbers that will help the two biggest government-backed loan buyers navigate a transition to new credit scores.
The downloadable figures, which span from April 2013 to March 2023, were designed to allow industry participants to consider how Vantagescore 4.0, one of two credit metrics the industry is moving to, compares to the traditional FICO metrics currently in use.
“The disclosure of past credit scores for tens of millions of loans is a far-reaching
“We are providing resources to help market participants prepare for this transition,” Federal Housing Finance Agency Administrator Sandra Thompson said in a press release.
The move could bring the mortgage industry closer to updated scores designed to help mortgage lenders underwrite more loans that can be sold to Fannie Mae and Freddie Mac.
The updated scores are designed to identify borrowers whose repayment abilities aren't captured by older standards, and while Fannie, Freddie and the FHFA have done a satisfactory analysis of the credit scoring criteria, lenders want to do their own analysis.
Lenders bear certain responsibilities for the loans they sell to Freddie and Fannie and could face what is called a repurchase or repurchase if certain deficiencies are found in underwriting, particularly if mortgage repayments go wrong.
Credit scores also play a key role in mortgage-backed securities investors' prepayment models, and mortgage insurers also rely on credit scores to assess risk, so those stakeholders are interested in the data, too, said Dan Fichtler, a senior adviser at the FHFA.
In line with previous guidance from FHFA, the regulator and administrator of the two government-sponsored entities, the release includes loan origination figures designed to enable analysis of loan performance over time when cross-checked with other data sets.
The new Vantagescore 4.0 information can be connected through loan identifiers to three sets of data disclosures already in place by the GSEs related to mortgage-backed securities, credit risk transfer, and past performance.
“This will allow users to see, for example, which loans have ultimately become delinquent or defaulted,” Fichtler said.
Asked about the industry's request for historical numbers covering the Great Recession to get a sense of how companies performed during the downturn, Fichtler noted some constraints based on the availability of trend data from credit bureaus.
He noted that trend data reflecting consumers' debt management over time has only been available from credit bureaus since 2013. Credit reports obtained prior to that time consisted of static snapshots of consumer data that reflected only a single point in time.
Fannie, Freddie and the FHFA are working to release data corresponding to their analysis of the FICO 10-T, another modernized score that Fannie and Freddie are moving forward with in response to a legislative mandate.
“We're also working hard to get it out there,” Fitchler said. “We wanted to move the data that we have as quickly as possible so people can start analyzing it.”