We, the undersigned, are writing to bring to your urgent attention to the critical flaws and limitations in the current credit scoring practices that are significantly impacting the ability of responsible borrowers to secure loans and lines of credit related to real estate, particularly primary residences.

The ongoing housing crisis is a multifaceted issue, influenced by factors such as high prices, high interest rates, supply and demand dynamics, inflation, the Covid-19 pandemic, zoning restrictions, and an aging population. While much attention has been given to these factors, we believe that an equally critical and often overlooked aspect is the financing limitations imposed by the current credit scoring system (for-profit, private credit rating agency's).

As experienced mortgage loan originators, we encounter numerous potential borrowers who exhibit a low risk of default, possess the ability to comfortably manage monthly payments, and have adequate reserves (savings). However, these individuals are often unable to secure financing due to a lack of traditional documentation (such as two years of tax returns, W-2s, and pay stubs) or due to unfairly low credit scores assigned by for-profit private institutions (credit bureaus).

The current credit scoring model penalizes borrowers for using too much of their available revolving credit limits, imposes penalties for hard inquiries, and reduces scores when installment accounts are successfully paid off and closed. This system is not only ineffective but also detrimental to countless Americans who are otherwise responsible borrowers, that work extremely hard.

We respectfully urge the Federal Housing Finance Agency, the Federal Trade Commission, and other relevant government entities to take immediate action to:

1. Review and Reform Credit Scoring Practices: Develop and implement a more comprehensive and fair credit scoring model that accurately reflects a borrower's ability to responsibly manage debt. This model should take into account factors beyond traditional documentation and existing credit scores.
2. Address the Impact of Credit Bureau Practices: Investigate the practices of credit bureaus and ensure that they do not unjustly penalize borrowers for actions that demonstrate financial responsibility, such as paying off debts or inquiring about credit options.
3. Expand Access to Home Equity: Facilitate access to untapped home equity for responsible borrowers, allowing them to leverage the value of their primary residences to improve their financial situations, expansion of businesses and contribution to economic growth.
4. Promote Transparency and Consumer Education: Enhance transparency in the credit scoring process and provide consumers with the education and resources they need to understand and improve their creditworthiness.

We believe that by addressing these issues, we can create a fairer and more effective system that allows responsible borrowers to access the financing they need, ultimately helping to alleviate the housing crisis and promote economic stability.

We thank you for your attention to this critical matter and look forward to your prompt action.