CHLA supports Pulte’s proposal for GSE credit score disclosures.

An industry letter to the Federal Housing Finance Agency argues for expanding the scope of loan- and borrower-level information disclosed in mortgage-backed securities pools to sharpen market transparency and improve pricing precision. The correspondence contends that more granular, standardized data would enable investors to assess credit performance, prepayment dynamics and pool composition with greater confidence, thereby reducing information asymmetry that currently supports conservative pricing and implicit cost cushions. The authors link enhanced disclosure directly to a potential reduction in recurring credit score cost increases, suggesting that clearer datasets could reduce the need for repeated precautionary adjustments in credit-pricing frameworks and curb reliance on conservative model buffers that can indirectly raise costs for borrowers.

The letter urges regulators to coordinate with issuers, servicers and data providers to define standard fields, delivery protocols and governance practices that preserve investor protections while addressing borrower privacy and operational cost concerns. It frames improved disclosure as a lever to increase market efficiency—potentially tightening spreads, enhancing liquidity and lowering long-term financing costs—while acknowledging practical hurdles such as data validation, custodianship, consumer privacy considerations and implementation expense. The authors position the FHFA as the central arbiter of tradeoffs between transparency gains and administrative burdens, recommending a careful, measured path toward reform that balances investor needs, market stability and responsible handling of sensitive borrower data.

– Letter to FHFA: A formal appeal urging the agency to require expanded loan- and borrower-level disclosures in MBS pools.
– Transparency and pricing: More granular data is presented as a way to reduce information asymmetry and improve investor pricing accuracy.
– Credit score cost impact: Enhanced data could lessen recurring credit score–related cost increases by reducing reliance on precautionary pricing adjustments.
– Implementation challenges: Standardization, data validation, governance, privacy protections and operational expense are highlighted as obstacles.
– Market implications: Potential benefits include tighter spreads and improved liquidity, balanced against privacy concerns and administrative burden.

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