Supplementing the Compare Ratio: An Important Step toward Opening the FHA Credit Box

Brief

Supplementing the Compare Ratio: An Important Step toward Opening the FHA Credit Box

June 9, 2014

Abstract

The FHA has been taking actions to reduce lender overlays, enhancing access to credit. Among these measures is the introduction of Supplemental Performance Metrics, to accompany the inflexible Lender Compare Ratios. In this article we reiterate the need for this type of metric, applaud the FHA for proposing it, and suggest a slight variation to make it even more effective.

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