A Rapid Rescore of a credit report is when a client provides documentation about erroneous information on their credit report…. And their Loan Officer submits these items to the credit bureaus to be updated. The loan officer doesn’t go directly like a consumer would. The loan officer will go through a 3rd party company that they use to pull credit. Examples are: Credco, Factual Data, ect….. The Rapid Rescore process takes 3 – 5 business days. It has been my experience that these rescores are usually done in 2 – 3 days. The 3rd party companies I have used in the past have all been pretty quick about turn times.
How much does Rapid Rescore cost?
Rapid Rescore costs the loan officer(or, rather the lender who is being billed for credit pulls) about $35 per trade line per bureau. So, if you need to correct 2 items on all 3 bureaus(Equifax, Experien, Transunion) then that is $35 X 6 = $210
Now, here is the good part!!!!
Of these 3rd party companies that I have used in the past…… Every one that I have ever discussed Rapid Rescore with has informed me that it is ILLEGAL to pass along the cost of the Rescore to the client. That’s right….. I said ILLEGAL!!! Technically it is a violation of RESPA (Real Estate Settlement Procedures Act). HUD defines this service as something that generates an ‘Unearned Fee’. Unearned Fees are not allowed per RESPA.
So…. Who pays for it? The lender does. It is simply a cost of doing business.
Will you be asked to pay for this from an unscrupulous or ignorant lender? Sure you will. But ignorance is no excuse for breaking the law. And this law has teeth. As an Act of Congress, lenders can be charged: Any person or persons who violate the provisions of this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both.
I don’t think it is worth it to cheat the system. And I wouldn’t work with a lender who cheats either. Do yourself a favor and read the law…. Know your rights. And if you have any questions about this article…. Contact The DallasLoanGuy, Tom Burris.
Tom Burris DallasLoanGuy.com NMLS# 335055 Dallas, TX
A LOT has changed in the world of Real Estate and Mortgages over the last few years.
That means that a Real Estate transaction today will be a LOT different than the transaction Cousin Eddie did 3 or 4 years ago. While I suggest that my clients listen to their friends/family for referrals to Real Estate & Mortgage Professionals….. I do have to warn you that the conflicting advice you get from them, vs your Real Estate/Mortgage Professional, might just differ quite a bit.
Who do you trust?
Good question!!!
After you have picked a Real Estate or Mortgage professional, you should already be pretty comfortable with that person. That is not to say that your Professional Representative will not offer advice or counsel that is in conflict with what Mom said or Cousin Eddie experienced when he did his loan back in 2004.
I recently was involved in a transaction that went sour when the seller backed out. The borrower didn’t understand…. They had an accepted contract….. Why couldn’t they buy the home?!?!?! The Buyer’s Agent answer was: “The seller is in foreclosure and the bank is now involved”. “Also, the seller has become dis-engaged with their own Seller Agent”. That didn’t sit well with the buyer….. And the Buyer Agent was fired. Come to find out….. ‘Mom’ worked in the foreclosure dept of a large bank and thought she knew a lot about Real Estate transactions in today’s market….. She didn’t!!! She told my client that the realtor didn’t know what they were doing.
So the question is: Who can you trust? Answer: It has to be yourself. As those in your sphere of influence might have very different experiences because of ‘when’ they did their loan. Do you think that you can trust their Advice to relate to your specific deal?
Whether it be Real Estate advice or Mortgage Advice, you need to use common sense and try to resolve conflicting information between all parties. Pointing fingers will not solve the problem. I have talked to a lot of Mom’s and Cousin Eddies over the years. This seems to alleviate many of the conflicts.
Got questions? Need Mortgage Advice? Call The DallasLoanGuy for an honest no obligation discussion about Mortgage Loans Today!!
Tom Burris DallasLoanGuy.com NMLS# 335055 Dallas, TX
Mortgage triggers - Don't Let Your Loan Get Denied Last Minute
Mortgage triggers result in the collections that show up when a credit report is re-pulled a few days prior to closing.
Collection agencies or third party debt buyers can purchase a mortgage trigger list just as a lender might buy mortgage leads.
Here is how it works. Sometimes collections agencies do not report derogatory trade lines until a borrower has applied for a mortgage. They buy a list of recent mortgage applicants and match it against their debtor list. The collection agency`s hope is that the borrower will contact them immediately with full payment for the collection after it "pops up". They know they have a motivated debtor. It is not a nice trick, but it works too often. The dilemma is even if the client pays there may be a chance that the credit score could still be reduced. The reason is because it could become a paid collection with a recent date of last activity verses an older unpaid collection with less of a credit score deduction.
Here is an option: When faced with this situation. Contract the creditor and request a proposed settlement agreement (prior to payment). The agreement should state in writing that they will remove or delete the trade line from the credit reporting agencies with a full or partial settlement and payment. Always get it in writing and on their company letterhead.
Another Strategy: If the collection is required to be paid by the lender, then have it paid thru closing. No chance of the credit report being updated when the mortgage company makes that 'Final Credit Pull'.
Most importantly!! Make sure your loan officer understands how all of this works. This is simple stuff, but I still hear stories about loan officers requiring a collection to be paid asap.... then the collection being updated by the time that final pull happens. And remember.... Not all lenders will require collections to be paid to qualify!!
Please feel free to download my FREE e-book titled 'About Credit'. Learn more about how credit works. Nothing to sign up for... just click below and it is yours.
A lot of times lenders will not approve borrowers who have open (and sometimes even paid) IRS tax liens, or will require IRS tax liens to be paid in full at closing as a condition of loan approval.
With FHA financing, the FHA/HUD doesn't require IRS tax liens to be paid unless there is information that the IRS has required to be in first lien position (which is what any lenders concern is, not being on first lien position on title). However, if there have been regular and timely payments on the tax lien (most lenders require a 12 month history) and the IRS is willing to subordinate to the new mortgage (see FHA guidance below), the tax lien can remain open. A copy of repayment agreement is needed to include the payments in the debt ratio, a payment history is needed to confirm the payments have been timely, and often the lender will require a title insurance binder be provided indicating no exception to subordinated tax lien. VA & USDA follow the same.
As a rule of thumb, with Fannie Mae & Freddie Mac financing, delinquent credit, including taxes, judgments, tax liens, mechanics' or material-men's liens and liens that have the potential to affect Fannie Mae's lien position or diminish the borrower's equity, must be paid off at or prior to closing. While rarely will exceptions be made for judgments which are on an established payment, in the past 5 years I have not heard of lenders making exceptions to anything else in the aforementioned sentence (back in 2005 I had a client once get away with not having to pay a state tax lien in conjunction with Fannie Mae financing).
However people with IRS tax liens who want to purchase a home are not always fortunate enough to have FHA, VA or USDA financing as options, as well as have a lender willing to not require the IRS tax lien to be paid in full, so the IRS tax lien will have to be dealt with.
Good news from the IRS, as in the end of February 2011 they announced efforts to help taxpayers with changes to their lien process. The IRS is increasing the dollar amount threshold at which a lien is generally filed, significantly they say, to keep up with inflationary changes. After the tax bill is paid, tax liens are being withdrawn upon request of the taxpayer. The Offer in Compromise (OIC) program eligibility limits are being expanded, doubling the maximum allowed tax liability limit, and increasing annual income limits to $100,000. IRS is making installment agreements available to more small businesses.
But the biggest announcement in relation to mortgage financing in my opinion, is that the IRS is willing to withdraw tax liens for taxpayers who owe $25,000 or less in tax liability, if a Direct Deposit Installment Agreement (DDIA) is set up. So this means you can start one up now, convert your existing installment agreement into a direct debit one, or if you are already in one then just call up and make a request to withdraw the tax lien. Of course it's not instant in all situations as the IRS wants to make sure that payments will be honored so there is an initial probationary period.
In practicality, this means someone who has an IRS tax lien can improve their creditworthiness to a mortgage lender by opting to go into the DDIA and eventually having the IRS withdraw their tax lien. It doesn't guarantee that someone who couldn't get approved before will now be approved, but it is a huge step in the right direction.
Currently available in:Arkansas, Colorado, Iowa, Kansas, Louisiana, Missouri, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Wisconsin, Wyoming and Utah.
Tom Burris DallasLoanGuy.com NMLS# 33505 Dallas, TX
This is not mine.... I found it.... But I get a lot of emails to put it up every year. If you are a College Football fan, this is a MUST HAVE spreadsheet!!!
I recently got an email offering me a video course for activerain Training.
I thought: "Wow.... Another perspective on how to use activerain".
Then the other show dropped..... After clicking through to the website I see a short 'bait' video asking me to purchase their product. "What?..... You want me to pay for it?"
LOL.... I had to feel sorry for them. Because activerain offers free ongoing training thru activerain University!!
Go to theactiverain University Training Calenderand look for a shopping cart or a dollar sign. <= You won't find one..... Because activerain training is FREE for all Rainmakers.
Sign up for some training today and MAKE IT RAIN!!!!
Thank you for using the Better Business Bureau's Online Complaint System againsRMCN Correspondence regarding this complaint will be emailed to : tomburris@dallasloanguy.com Please print a copy of this for your records.
Filed on : September 12 2011
Filed by : Tom Burris 4020 Medina Dr Plano TX 75074
Filed against : RMCN Credit Services, Inc
After more than 50 phone calls to my cell phone soliciting business from me.... I felt that it was necessary to get help. I am sick of their sales calls. i do not want to refer them business.
I was actually told that thy do not have a 'do not contact' list from more than one representative.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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