Lower head counts at the mortgage giant reduced administrative expenses by $145 million in the second quarter, though profits were still down 9% sequentially.

Much of the downturn was in pools with high concentrations of loans that accomplish GSE missions and other social goals.

Loans one payment past due increased 19 basis points during the second quarter, after declining during the first quarter.

Credit scores are a key input in predicting prepayment speeds, which in turn affect valuations and hedge strategies.

Nonbanks handled 60.7% of GSE servicing as of the end of June.

"Your behavior raises significant questions about your judgment and commitment to operating FHFA in a responsible, competent and lawful manner," Sen. Elizabeth Warren, D-MA, wrote to FHFA Director Bill Pulte.

While many of these tools have been included in GSE automated underwriting systems for some time now, both Fannie and Freddie are highlighting the role of third-party data, income modeling and rent recognition in reducing friction and expanding the pool of mortgage-eligible borrowers.

Refi activity was up 27.1% from the first quarter and purchase volume rose 19.1%.

The share of GSE purchase mortgages with credit scores of at least 740 increased from 73.8% in the first quarter of 2025 to 74.6% in the second quarter.

The MBA said increased competition in the credit score space could improve competition in the mortgage space “if implemented correctly.”