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WASHINGTON
–
In
a
bipartisan
effort
to
help
more
everyday
Americans
achieve
homeownership,
U.S.
Senators
Tim
Scott
(R-SC)
and
Mark
Warner
(D-VA)
introduced
legislation
to
include
some
of
the
26
million
“credit
invisible”
individuals
in
the
housing
market.
The
Credit
Score
Competition
Act
directs
the
Federal
Housing
Finance
Agency
to
create
a
process
by
which
credit
scoring
models
can
be
validated
and
approved
for
use
by
Fannie
Mae
and
Freddie
Mac
(GSEs)
when
they
purchase
mortgages.
Currently,
the
GSEs
are
mandated
to
consider
a
decades-old
credit
scoring
model
that
does
not
take
into
account
consumer
data
on
rent,
utility,
and
cell
phone
bill
payments.
This
exclusion
disproportionately
hurts
African-Americans,
Latinos,
and
young
people
who
are
otherwise
creditworthy.
“After
growing
up
in
a
small,
two-bedroom
house
with
my
grandparents,
I
came
to
understand
and
appreciate
the
independence
that
comes
with
the
notion
of
owning
a
home,”
said
Scott.
“Homeownership
is
a
huge
part
of
the
American
Dream,
and
I
want
to
help
folks
across
the
country
accomplish
that
goal.
The
current
credit
scoring
model
at
the
center
of
our
housing
market
overlooks
a
large
swath
of
people
that
are
paying
their
monthly
bills
on
time
and
deserve
an
opportunity
to
pursue
homeownership.
This
is
an
opportunity
to
make
our
system
more
fair
for
everyone
without
lowering
the
bar
for
qualification.”
“There
are
millions
of
Americans
who
pay
their
rent,
utilities,
or
cell
phone
bills
on
time,
yet
aren’t
considered
‘credit-worthy’
under
federal
housing
finance
standards
because
they
lack
access
to
traditional
lines
of
credit,
such
as
auto
or
student
loans.
These
‘credit
invisible’
Americans
are
disproportionately
young,
new
Americans
or
people
of
color.
Our
goal
in
introducing
this
legislation
is
to
encourage
Fannie
Mae
and
Freddie
Mac
to
consider more
inclusive
methodologies in
determining
a
borrower’s
creditworthiness.
Alternate
scoring
models
have
the
potential
to
make
homeownership
a
reality
for
more
qualified
borrowers
who
lack
access
to
traditional
forms
of
credit,”
said
Warner.
In
South
Carolina
alone,
only
77%
of
adults
can
be
scored
under
the
model
currently
used
by
the
GSEs.
An
additional
16%
of
South
Carolinians
can
be
scored
under
newer
credit
scoring
models
in
the
market.
The
legislation
has
already
received
support
from
twenty
consumer
and
industry
groups.
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