Lenders Advocate for Single Credit Report Standard
The Mortgage Bankers Association is lobbying the Trump administration to overhaul a long-standing mortgage underwriting rule for loans backed by Fannie Mae and Freddie Mac. The proposal seeks to replace the current requirement for a "tri-merge" credit report—which compiles data from all three major bureaus (Equifax, Experian, and TransUnion)—with a single credit report. Proponents argue this would reduce borrower costs, which currently stand at $80 to $100 for a tri-merge report, but these checks represent less than 1% of total mortgage origination costs.
'Score Shopping' Could Mask Risk by Over 80 Points
Critics warn the proposed change would enable "score shopping," allowing lenders to select the most favorable credit score for an applicant, thereby underpricing risk that is ultimately backstopped by taxpayers. While the score difference for prime borrowers averages 26 points across the three bureaus, for some subprime borrowers this gap can exceed 80 points—a variance significant enough to determine eligibility for a government-guaranteed loan. An analysis by Andrew Davidson & Co. confirms that single-bureau scores often differ enough from the tri-merge median to materially impact loan pricing, with the effect being most pronounced for borrowers with credit scores between 600 and 639.
Proposal Surfaces as Underwriting Standards Already Loosen
This potential policy shift arrives as other lending safeguards have been relaxed. In November, Fannie Mae eliminated its minimum 620 credit-score requirement. Simultaneously, the proportion of new borrowers with a debt-to-income (DTI) ratio above the 43% threshold—a level generally considered risky—has climbed to 36%. This figure is approximately double the level from a decade ago, signaling a broader trend of increasing risk exposure within the government-sponsored mortgage market. In response to these trends, some lawmakers are pushing back, with legislation introduced in April 2024 aiming to codify the tri-merge requirement into law.
