Latest on Mortgage Lenders and Credit Reports
Recently, experts reported that Mortgage Lenders may have to start pulling a second and final credit report just before a homebuyer closes on their new home purchase.

Mortgage giants Fannie and Freddie felt that loan applicants were acquiring debt during the application process and not disclosing it properly.


The final ruling on this issue has come out and it turns out lenders do NOT have to pull a secondary/final report prior to closing. Instead, the original credit report “validity period” will remain at 90 days meaning that the credit report lenders pull in the beginning of the transaction is good for 90 days.


With all of this being said, it is still VERY important for homebuyers not to have their credit pulled AND not to make any purchases that would show up on their credit report until after their home has closed.

It is important to keep in mind that lenders are developing systems such as “FRAUD GUARD” that will help them detect any recent credit activity (such as an auto loan app, new credit card etc…).

In the end, while Lenders will not be required to pull new credit reports, homebuyers may as well act as if they will.

Here is a little bit of the “why” behind this development:

• Over the past year $142 million in auto loan payments that were created during the home loan application process were magically left off of loan applications


• The “missing” auto loans had an average payment of $361 per month – a pretty sizeable payment that could likely push some borrowers over the qualifying edge