Federal Housing Finance Agency Director Bill Pulte said he spoke with FICO's chief executive to ensure the program is approved. The stock is rebounding from what was its worst quarter on record.
Fair Isaac's shares got their best news in weeks from the official whose decisions had sent them lower.
On Thursday, FICO introduced what it calls the FICO Mortgage Direct License Program. Lenders that use it could pay as much as 50% less per score, the company said. Federal Housing Finance Agency Director Bill Pulte wrote on X that he had spoken with Chief Executive Will Lansing "to ensure FICO Direct is approved on our end."
The stock rose about 13.1% to near $669.94 by early afternoon, from Wednesday's close of $592.47.
Why the regulator matters
FHFA oversees Fannie Mae and Freddie Mac, which set the rules for which credit scores mortgages they buy must carry. For decades that meant FICO. Pulte has since allowed the two companies to accept VantageScore 4.0, a rival score, and after a limited rollout in the spring, that option was extended this month to all mortgages sold to them.
On Sept. 29, FICO fell 26.5% after the agency announced a unified pricing grid. The stock had its worst quarter on record in the three months that ended Wednesday. Bank of America halved its price target on the shares.
What Pulte said
Pulte framed his support as a matter of competition rather than favor. "We do not care who wins," he wrote, adding that the agency wants FICO and Vantage "to compete."
That stance cuts both ways for FICO. Approval of the direct program lets it keep its place in mortgage underwriting at a lower price. A lower price, though, means less revenue per score in a business that has leaned on pricing power.
Two readings
One reading is that Thursday removed the worst case. With the regulator signaling approval, FICO stays embedded in the largest U.S. lending market, and the stock had already absorbed a quarter of heavy losses.
A second reading is that the program confirms the new economics. Cutting fees by as much as half to defend share against an approved competitor resets what mortgage scoring is worth to FICO, whatever its market share ends up being.
What comes next
FHFA's formal approval of the program, and how many lenders sign on, are the next markers. FICO's next quarterly report will show how much per-score pricing in mortgages has changed and whether higher volume can offset it.