Fannie Mae’s move to drop the 620 score floor could expand access to mortgages, but if the new scoring models misread default risk, the losses will spread across the entire system
Fannie Mae is set to drop its 620 credit score minimum this month. On the surface level, this is huge, renters with good payment history, young people with thin files, anyone locked out by arbitrary score floors suddenly has a shot at conventional financing. Also, first time buyers are collapsing so Fannie Mae desperately needed …