CHLA Expresses Concerns About Single Bureau Credit Pulls
The Community Home Lenders of America (CHLA) released an Addendum to their 2024 White Paper on Mortgage Credit Score Markets and Pricing that expresses concerns about proposals to create a single credit bureau pull model.
The CHLA Addendum states that CHLA does not support a single credit bureau pull – and lists the following concerns that led to that decision:
- Costs will likely not be reduced – and could increase.
- A Single Bureau Credit Pull model could disadvantage veterans, rural families, and first-time homebuyers.
- Costs could increase for consumers that shop for mortgage rates.
- A switch to a single bureau model could make it harder for aggregator/investors to price loans – leading to risk premiums in loan pricing that raise rates.
- Pricing uncertainty will increase based on what score, what bureau is used.
- Not all data sources report to all three bureaus. This could also lead to greater repurchase risk for lenders.
- A lack of coordination among the major federal housing regulators (FHA, RHS, VA, and FHFA), could complicate this model greatly.
- Gaming or score fishing will be incentivized.
- Concerns about how Mortgage Insurers (MIs) will view and price in response.
- While investors may pick one bureau/one score and require its use, some investors require different bureaus or scores.
The CHLA letter then goes on to explain why claims that all three Credit Bureaus produce similar results (an argument for a single bureau credit pull) are not supported by the facts.
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