By Clea Benson | Bloomberg
Barrett Burns has been lobbying Fannie Mae (FNMA) and Freddie Mac to adopt his credit-scoring system, VantageScore, for years. So when he spotted Mel Watt, the companies’ regulator, sitting in a Las Vegas hotel with his family, Burns didn’t hesitate to approach and make his pitch.
“I said, ‘We’d be pleased to come down and present our side of the business case to you,’” Burns, the chief executive officer of VantageScore Solutions LLC, said he told Watt at the annual Mortgage Bankers Association conference earlier this month. “He said, ‘Yeah, come on down.’”
The CEO’s chance encounter with Watt was part of his eight-year effort to break Fair Isaac Corp. (FICO)’s lock on providing credit scores for loans backed by Fannie Mae and Freddie Mac. (FMCC) VantageScore’s supporters say its scores better predict creditworthiness for a broader spectrum of borrowers, including minorities and first-time homebuyers who are struggling to get mortgages today. In August, Fannie Mae and Freddie Mac, which buy most of the new loans for home purchases, began to study the feasibility of using VantageScore and other alternatives to FICO.
“We were a fish swimming upstream against the current,” Burns, 69, said. “Now, it seems the current has turned.”
