WASHINGTON — Shares of Fair Isaac Corp. fell 8% in after-hours trading Monday after the federal housing regulator said Fannie Mae and Freddie Mac would move to a unified mortgage pricing grid that includes rival VantageScore alongside FICO Classic, according to reporting provided from Yahoo Finance.
Federal Housing Finance Agency Director Bill Pulte announced the change on X, saying feedback from lenders and consumers helped drive the decision. He said maintaining two separate pricing grids “makes zero sense.”
The grid is used to calculate loan-level price adjustments, fees that can affect the cost of a conventional mortgage. A borrower’s credit score and down payment are among the factors used to determine those fees.
Increased Competition
Putting VantageScore and FICO Classic on the same pricing grid could allow lenders to use either model when pricing eligible mortgages sold to Fannie Mae or Freddie Mac, according to the report. That would increase competition for FICO, which has long benefited from the use of its scores in that market. VantageScore was created by the three major credit bureaus.
The announcement concerns how the scores will be used in mortgage pricing; Fannie Mae and Freddie Mac had already begun accepting VantageScore for eligible loans. Investors reacted to the prospect that lenders could rely less on FICO scores and the fees charged to obtain them, Reuters reported.
The FHFA did not specify when the unified grid would take effect, according to the report.
