According to HousingWire, the Mortgage Bankers Association is putting real pressure on federal regulators and the credit reporting industry to scrap the tri-merge credit report requirement. At their annual convention in Chicago, MBA President Bob Broeksmit was direct about this, saying that the current system of pulling data from all three credit bureaus is outdated, expensive, and won't stick around much longer. He's been one of the loudest voices pushing for something simpler, especially for loans with lower risk profiles, as lenders are dealing with tighter margins and rising compliance costs.
The Federal Housing Finance Agency is apparently listening. The FHFA director recently indicated that they're looking at both a bi-merge option, which would use two bureaus instead of three, and potentially even a single-pull model. The FHFA has also opened the door to accepting either Classic FICO or VantageScore 4.0 scores. While the FHFA director was supposed to make an announcement about this shift at the MBA conference, he canceled his in-person appearance and will speak virtually instead.
The reasoning behind this push is straightforward economics. Tri-merge reports add real cost to each loan file, and moving to fewer bureaus could potentially reduce what borrowers pay and what lenders spend on the process. That said, there are legitimate concerns about whether using less data might create issues with consistency in risk assessment and could require significant changes to how loans are underwritten.
Not everyone is on board with this direction. The Consumer Data Industry Association, which represents the credit reporting companies, is pushing back hard. They argue that more data actually leads to better outcomes and keeps borrowing costs down, and that the tri-merge system is essential for keeping the mortgage industry safe and sound.
Beyond the credit reporting fight, Broeksmit also touched on other regulatory matters affecting the industry. The MBA is supporting a new appraisal dataset requirement that had been coming but will now get a delayed implementation date, recognizing that appraisers, management companies, and lenders needed more time to prepare. On the servicing side, the mortgage industry is expecting a new Basel III capital rule proposal by year-end that should be more favorable to mortgages than earlier versions.
What I am seeing locally here in the Bay Area and across the East Bay is that lenders are already feeling the squeeze from these compliance costs, and anything that streamlines the process without compromising credit quality would be welcome news. If tri-merge goes away in favor of a bi-merge or single-pull approach, it could mean modest savings that might get passed along to borrowers, which is always worth paying attention to in a market where affordability is already a challenge for Fremont and East Bay buyers.
