Fair Isaac Suffers Worst Single-Day Collapse Since 1989 After FHFA Strips FICO Mortgage Monopoly

Fair Isaac shares plunged roughly 27 percent on Tuesday, their steepest single-day decline since 1989, after Federal Housing Finance Agency Director Bill Pulte announced that Fannie Mae and Freddie Mac will consolidate mortgage pricing onto a single unified grid and place VantageScore alongside Classic FICO on equal footing. The regulatory change eliminates a structural advantage FICO had long held: VantageScore borrowers will now reach the top pricing band at a score of 780 or above, the same threshold as FICO, erasing the previous 20-point disadvantage that had effectively kept lenders tethered to the more expensive product.

The pricing gap between the two scores is substantial. VantageScore costs approximately $0.99 per score, compared with roughly $10 for a FICO score, giving lenders a dramatically cheaper alternative now operating within the same regulatory framework. Rocket Mortgage has already signaled support for the rival score, and analysts at Huber Research issued negative commentary on the stock following the announcement.

The stock traded as low as approximately $614, with some reports placing it near $623 to $635 during morning trading. Mizuho and Jefferies both reiterated their existing ratings without upgrades, offering little reassurance to investors. The shares are now down more than 62 percent year to date and have shed more than 30 percent over the past five trading days alone, pulling the stock below its September 2023 close of $868.53. At current levels, FICO has retraced to near its 2021 peak after a run that took it from roughly $10 at the post-financial-crisis lows to a high near $2,382.