MBA urges FHFA to allow single-bureau credit pulls, potentially reshaping PennyMac operations

Mortgage billing tug-of-war hits lenders like PennyMac

Push to reduce tri-merge credit pulls could reshape lender operations

The Mortgage Bankers Association is urging the Federal Housing Finance Agency to let mortgage lenders use a single credit bureau report for borrowers with credit scores of 700 or higher, a move that could materially change how firms such as PennyMac Financial Services underwrite and price loans. The MBA says in a Dec. 12 letter to FHFA Director Sandra Thompson that fees for credit reports — a growing closing-cost flashpoint — could rise 40% to 50% on average in 2026, and that allowing single-bureau pulls for higher-scoring borrowers would cut costs and friction.

For PennyMac and other retail and correspondent lenders that rely on selling loans to Fannie Mae and Freddie Mac, the proposal intersects with broader shifts in automated underwriting. Fannie Mae recently removes a minimum credit score from loans processed through its automated system, which pushes lenders to re-examine legacy practices like tri-merge reports. Because FHFA sets standards for the two government-sponsored enterprises, any change to credit-reporting requirements or allowable fees would quickly cascade into operational workflows, disclosure forms and closing cost calculations across the industry.

The debate centers on trade-offs between efficiency and redundancy. Lenders argue single-bureau pulls reduce time and expense for routine, high-credit borrowers — potentially easing borrower complaints about closing costs — while consumer advocates and some industry participants warn that eliminating the second and third bureau checks could weaken fraud detection and underwriting safeguards. The FHFA faces pressure to balance lower transaction costs with protections that preserve secondary market stability.

Borrower credit profiles and market context

Most homebuyers have relatively strong credit, which strengthens the MBA’s cost-argument: the New York Federal Reserve reports average credit scores of 734 for first-time buyers and 775 for repeat buyers in 2024, suggesting many borrowers would qualify for streamlined pulls. Lenders such as PennyMac must weigh whether operational savings on routine files justify changing policies that currently rely on tri-merge verification.

Regulatory oversight and next steps

Industry groups anticipate FHFA review and coordination with consumer protection agencies before any change is approved. PennyMac and peers may need to update compliance programs, vendor contracts and loan sale disclosures if FHFA alters allowable credit-report practices, while regulators stress careful oversight to protect consumers and maintain mortgage market stability.