VantageScore 4.0 is coming for mortgages, but work must be done

For about a week, the mortgage industry operated in confusion about what comes next. It wasn’t even clear whether the Federal Housing Finance Agency (FHFA) wanted both FICO and VantageScore scores, or if they wanted lenders to choose between the two.

FHFA Director Bill Pulte on Tuesday afternoon clarified several key points about Fannie Mae‘s and Freddie Mac‘s embrace of VantageScore, which is collectively owned by the three major credit reporting bureaus — Experian, Equifax and TransUnion. The tri-merge credit report will also remain.

Pulte said lenders will be able to choose between FICO Classic, introduced in the late 1980s, and VantageScore 4.0. The GSEs will be working to update their Selling Guide policies, but at the moment they are not currently able to purchase…