@ChiknNuggz wrote:
So im getting ready to get a mortgage loan in October and I've had 2 different lenders advise me that starting this month or next month that the mortgage scoring model will be changing. Currently all lenders take your middle mortgage score to see if your approved credit wise. With the new structure they will take the average of the the scores to determine your mortgage score. Has anyone heard of this happening?
That's not exactly accurate.
Here is what they're talking about:
From Fannie Mae:
Credit Score Eligibility in DU
Though credit scores are not an integral part of DU's risk assessment, DU currently uses credit scores to ensure compliance with
the 620 minimum representative credit score requirement. To support home ownership opportunities for more underserved
borrowers, we are updating the credit score used by DU in the eligibility assessment. For loan casefiles with more than one
borrower, DU will now use an average median credit score as follows when determining if a loan casefile meets the minimum
credit score requirement of 620:
- First, DU will determine each borrower’s applicable credit score (middle of the three scores received, or the lower of
the two when only two scores received).
- Second, DU will average the applicable credit scores for all of the borrowers on the loan casefile to determine if the
620 credit score requirement is met.
Note: This method will not result in a credit score lower than the representative credit score. The average median credit
score will either be:
- the same as the representative credit score for loans with one borrower, or
- the same or higher than the representative credit score for loans with multiple borrowers.
The following is an example of how the average median credit score will be calculated.
Step 1: DU will determine each borrower’s applicable credit score
Borrower 1 590 - 619 - 648
Borrower 2 661 - 693 - 693
Step 2: DU will average the borrowers’ applicable credit scores to ensure a minimum 620 credit score for the DU loan casefile.
656 - (average of 619 and 693)
In this example, the representative credit score of 619 would continue to be used for pricing, mortgage insurance, and provided at loan delivery.
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