MPF Program: Equifax Coding Issue Update
Effective Date: Immediately (applies to all mortgage loans impacted by Equifax coding issue)
The MPF Program recently published MPF Announcement 2022-25, notifying PFIs of the Equifax® Inc. coding issue that may have resulted in errors to consumer credit scores and credit data reported from March 17 to April 6, 2022.
The MPF Program is issuing this guidance to provide requirements that apply specifically to impacted mortgage loans. This guidance supersedes any conflicting guidance or recent Announcements regarding the Equifax Coding Issue.
As a reminder, any questions related to the coding issue must continue to be directed to Equifax or credit report provider.
For MPF Government loans and MPF Government MBS loans, PFIs must follow guidance issued by the applicable Government Agencies.
For MPF Xtra loans, PFIs must follow guidance issued by Fannie Mae, including Lender Letter LL-2022-02.
The MPF Program will be obtaining a list of affected MPF Xtra loans from Fannie Mae, and will be reaching out to all PFIs with affected MPF Xtra loans to ensure PFIs can perform the requirements of the Lender Letter.
PFIs are reminded they should not be contacting Fannie Mae directly, and that any escalations or self-reports related to this Announcement or questions regarding this process should be directed to email@example.com.
Credit Report Data
The MPF Program has determined that any errors to the underlying credit report data for any MPF Traditional loan resulting from this incident are not considered to be material erroneous credit data errors under the Guides and the following requirements apply:
- PFIs are not required to obtain an updated credit report and re-underwrite the loan by resubmitting the loan to the applicable AUS (Desktop Underwriter® (DU®) or LPA), or to re-assess the underwriting decision for non-AUS loans, based solely on this issue.
- The inaccurate credit score used at time of underwriting does not render the mortgage loan ineligible for purchase.
- A repurchase request will not be issued based solely on this issue.
The corrected credit score (sometimes referred to as a simulated credit score) obtained directly from Equifax or a credit report provider must be used to recalculate the representative credit score (or average median credit score for mortgage loans underwritten through DU with multiple borrowers). Provided the mortgage loan was eligible based on the representative or average median credit score used at time of underwriting, the recalculated credit score is not required to meet the minimum credit score required for the transaction.
The following table provides the requirements for making data corrections.
Obtaining corrected credit scores
Data corrections for mortgage loans not yet Delivered into the MPF Program
Data corrections for mortgage loans already Delivered into the MPF Program
PFIs will be notified of any changes in Credit Enhancement (CE) that may result from any such data correction.
For impacted loans, we are not requiring PFIs to reassess the underwriting decision as part of the PFI’s post-closing quality control review if this is the only data discrepancy. PFIs are not required to self-report loans due solely to this issue.
Representation and warranties
Mortgage Loans underwritten with an AUS and received an acceptable DU or LPA recommendation will continue to be considered eligible for any representation and warranty relief in accordance with the applicable AUS, provided all other requirements are met.
In addition, inaccurate credit scores due to the Equifax coding error are not considered to be data inaccuracies subject to life-of-loan representations and warranties.
- MPF Announcement 2022-29