Fair Isaac sinks as Fannie and Freddie open door to a FICO rival
-26.52% to $617.87 from $840.89
What moved FICO
- Federal Housing Finance Agency director Bill Pulte said Fannie Mae and Freddie Mac will move to a single, unified mortgage pricing grid that incorporates VantageScore data alongside the existing FICO Classic score, ending FICO’s decades-long exclusivity in agency mortgage underwriting.
- For years, Fannie and Freddie, which together back roughly 70% of the U.S. mortgage market, accepted only FICO scores for borrower qualification; the shift opens that pipeline to a rival scoring model for the first time.
- VantageScore is expected to remain considerably cheaper than FICO for at least the next two-plus years for scores run through TransUnion, intensifying pricing pressure on Fair Isaac’s mortgage business.
- Rocket Mortgage, one of the country’s largest lenders, said it will begin accepting VantageScore as its preferred scoring model going forward.
- The decline ranked among Fair Isaac’s steepest single-session drops in more than six years, with technical analysts noting the stock broke through key support levels on the news.
Sources: Yahoo Finance · The Motley Fool · GuruFocus · Schaeffer's Investment Research