FNMA and Freddie Mac are on the verge of requiring lenders to pull a 2nd credit report just prior to funding. When they do, we expect all of our secondary market investors to do the same, and they will probably require us to do so on government loans as well as conventional files. The ramifications of this are enormous:
1) Small FICO score changes due to something as simple as a slightly higher credit card balance could change a customer's interest rate, or cause the loan to be denied, at the last minute.
2) New debts or obligations could cause a customer to no longer qualify.
3) Recently recorded judgments or collection accounts that were not on the original report could derail a transaction just before funding.
I know that many of you counsel your clients regarding their use of credit while they are shopping for homes or while they are in escrow, but it will be more important than ever going forward that we all work together to remind them of what can happen.
No more moving back in with Mom and living on charge cards while you save up your down payment!
