FHFA Empowers VantageScore, Sending Credit-Score Stocks Tumbling
FNMA sits 64% above its 52-week low of $3.6 on light trading volume (0.2× avg).
Summary
FHFA Director Bill Pulte announced Fannie Mae and Freddie Mac will now accept mortgages backed by VantageScore, a direct competitor to FICO. This expands the GSEs' credit-score options and pressures the incumbent credit-score industry, whose stocks are tumbling Friday. The move follows Pulte's earlier fight with the industry and could shift market share in mortgage credit scoring. For Fannie Mae, the change may reduce reliance on FICO and potentially lower costs, but the immediate market reaction is negative for credit-score providers. Watch for further FHFA guidance on implementation and any response from FICO or other incumbents.
At the time of this announcement, FNMA was trading at $5.91 on OTC in the Finance sector, with a market capitalization of approximately $6.8B. The 52-week trading range was $3.60 to $15.99. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.