Weighted FICO scores among Fannie and Freddie mortgages eased a bit in the second quarter of 2011.
While low credit score mortgages remain a small portion of mortgages, less than one percent, the share of mortgages to high-credit borrowers has declined somewhat and brought down the weighted average credit score at both Fannie and Freddie.
Average credit scores remain much higher than in the 2005 to 2008 period, but the reversal of the tightening trend given the quality of recent loan performance is a good sign for the housing market.
In 2005, credit scores for Fannie and Freddie mortgages were near 720. In 2009 and 2010, credit scores averaged around 760. Further, nearly three quarters of the single-family business had credit scores above 740 in 2009 and 2010.
Low credit mortgages, those below 620, dwindled to 1 percent or less in 2009 and 2010.