Beware The 11th-Hour Credit Report Repull

In the new Loan Quality Initiative environment, Fannie Mae wants lenders to verify that an applicant’s credit profile did not change while the loan was in underwriting.  Lenders will have to do a soft credit pull within 72 hours of closing.
 
Lenders will look for evidence of any of the following events occurring while the loan was being underwritten.
·         Did the applicant apply for new credit cards?
·         Did the applicant run up existing cards?
·         Did the applicant finance an automobile, or other major purchase?

If the more recent credit report reveals inconsistencies versus the original credit report, the mortgage is subject to a complete re-underwrite and a possible turndown.

Make sure your buyers are aware of the last minute credit pulls so there are no surprises at closing.

Courtesy of Dan Hegarty, Mortgage Banker with Monarch Mortgage

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