Written by: Internal Analysis & Opinion Writers
The Mortgage Bankers Association (MBA) is urging a major overhaul of how lenders access credit data for loans delivered to Fannie Mae and Freddie Mac, calling their tri-merge mandate—requiring credit reports from all three major credit bureaus—"an outdated relic" that drives up costs and limits choice.
MBA President and CEO Bob Broeksmit announced that the association’s Residential Board of Governors has passed a resolution asking the Federal Housing Finance Agency (FHFA) to end the tri-merge requirement. In a video message, Broeksmit emphasized that advancements in credit reporting have rendered the practice unnecessary—and inefficient.
“Tri-merge is an outdated relic from a time when data was fragmented,” Broeksmit said. “If designing a system today, no one would choose that redundant model. It raises costs, offers no real benefit, and limits flexibility.”
Traditionally, obtaining credit information from Equifax, Experian, and TransUnion has added complexity, time, and expense to the lending process. Broeksmit suggested that a more streamlined approach—such as reducing to bi-merge or even single-report models—would align mortgage underwriting with other consumer finance sectors like auto and home equity lending.
He noted that MBA is exploring the feasibility of a single-report system. Initial feedback suggests that it could be implemented safely and effectively, especially considering that Fannie and Freddie do not use tri-merge credit scores directly in their automated underwriting systems.
Broeksmit praised FHFA Director Bill Pulte’s proactive stance toward reducing borrower costs and opening the mortgage industry to competitive scoring systems like VantageScore 4.0. He reaffirmed that expanding credit score options must be accompanied by reforms to how those scores are accessed.
Changing the tri-merge requirement will not happen overnight. The MBA is collecting data and meeting with stakeholders—including the GSEs, regulators, investors, and tech providers—to ensure any transition maintains market stability while lowering costs.
The broader credit industry has pushed back, citing concerns that diverging data sources between bureaus—augmented now by utility, rent, and telecom payment information—could introduce discrepancy if fewer reports are used. However, the MBA argues that modern data analytics and cross-bureau consistency make the traditional tri-merge model unnecessary in most cases.
A formal comment and implementation framework has not yet been released, but momentum appears to be building. If realized, this shift could mark a significant step toward modernizing mortgage credit reporting—reducing borrower expenses, increasing operation efficiency, and fostering innovation in scoring.
