Trade Groups Support Legislation to Upgrade Credit Scoring – NMP Skip to main content

Trade Groups Support Legislation to Upgrade Credit Scoring

Phil Hall
Jul 12, 2016

A coalition of housing-focused trade groups is calling on Congress to pass new legislation designed to responsibly expand mortgage credit to borrowers that lack access to traditional forms of credit. The trade groups are calling for the passage of S. 2355, the “Credit Access and Inclusion Act of 2015,” and its House of Representatives companion bill, HR 4172, the “Credit Access and Inclusion Act of 2015.” The trade groups are also calling for the passage of two additional House bills: HR 4211, the “Credit Score Competition Act of 2015,” and HR 123, the “FHA Alternative Credit Pilot Program Reauthorization Act of 2015.” All of these bills have bipartisan support.

In calling for the passage of these bills, the trade groups stressed that they were not seeking to loosen or weaken existing lending standards, but to bring about the acknowledgment that traditional credit scoring processes often overlook many creditworthy individuals, particularly in rural, low-income and minority communities.

“A borrower’s credit score is a critical access factor when trying to enter the housing market; with a poor score, or none at all, a borrower will struggle to obtain a mortgage loan or be faced with a higher priced loan,” the trade groups wrote in a letter to Congress. “Yet millions of Americans, particularly minorities, immigrants, and people with modest incomes, may come from backgrounds that avoid debt, leading many to have little to no credit history. With new credit scoring models that incorporate additional predictive metrics and payment history, many of these “thin file” individuals would be able to obtain credit and enter the housing market. Additionally, by clearing the way for utility, telecommunication companies and rental histories to be reported for on-time payments to the credit reporting agencies, many of these individuals with little to no credit files would be able to access credit.”

The trade groups supporting these bills are America's Homeowner Alliance, American Escrow Association, Asian Real Estate Association of America, Habitat for Humanity International, Leading Builders of America, Mortgage Bankers Association, National Association of Hispanic Real Estate Professionals, National Association of Home Builders, National Association of Real Estate Brokers, National Association of Realtors, Real Estate Valuation Advocacy Association, The Realty Alliance and RESPRO. One prominent civil rights organization, the National Urban League, also signed on to the letters to Congress. 

Published
Jul 12, 2016
Governor Appoints Marty Green To Texas Finance Commission

Green has over 30 years of high-level experience in the legal, banking, and financial services industries.

Regulation and Compliance
Jun 27, 2022
NAHB Chairman Blasts Biden Administration Over Lumber Tariffs

Says refusal to cut tariffs on Canadian lumber turns 'a blind eye to America’s housing affordability crisis .'

Regulation and Compliance
Jun 23, 2022
CFPB Director: Agency Reviewing QM Rules, Other Regulations

In a blog post, Rohit Chopra says the goal is to “more clearly communicate the agency’s expectations.”

Regulation and Compliance
Jun 21, 2022
New GSE Guidelines Challenge Condo/Co-op Lenders

Lenders have a terrible time obtaining up-to-date and accurate info from public data

Regulation and Compliance
Jun 16, 2022
10 Legal Steps Every Small Business Should Take

Stay guarded to limit your liability

Regulation and Compliance
Jun 16, 2022
The Fed Boosts Benchmark Rate By 0.75%

Increase is the largest since November 15, 1994.

Regulation and Compliance
Jun 15, 2022