Will Your Mortgage Lender Pull a New Credit Report The Day of Closing????

Does Fannie Mae require a new credit report right before closing?  The answer to this question is no. 

It is true that many lenders are in fact pulling a new credit report the day of or just a few days prior to closing.  This is due to an mis-interpretation of an announcement that Fannie made in 2010. 

On February 26, 2010, Fannie Mae issued Lender Letter LL 2010-03 as part of its Loan Quality Initiative. Part of this initiative involves undisclosed liabilities.  The announcement read:

"Lenders are responsible for determining that all debts incurred or closed by the borrower, up to and concurrent with settlement on the subject mortgage loan, are disclosed on the final loan application that is signed by the borrower at closing. These debts must be evaluated and included in the qualification for the subject mortgage loan. Lenders must have adequate internal controls and processes to support this requirement." 

Some mortgage companies took this to read that a new credit report is required.  That was not Fannie's intention.  To further clarify its position, Fannie Mae released announcement 2010-11.  This announcement read:

"An unintended consequence of Announcement SEL-2010-01 was the misinterpretation by some lenders that Fannie Mae was implementing a new requirement that the borrower be requalified up until closing. Therefore, many lenders believed this required a new credit report just before the closing of the loan. This was not Fannie Mae's intent, and as previously stated, the intent was and continues to be to reinforce lenders' existing representations and warranties."

In lieu of pulling a new credit report, it is acceptable for an existing credit report to be used so long and it is monitor until he day of closing.  This is the most beneficial method since it does not impact the borrower's credit score.

Borrowers do need to be aware that any and all credit inquiries must be addressed before the loan can be funded.  This includes inquiries for utilities.   The opening of any new credit accounts can impact the borrower's ability to close on time.

 

 

It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!

 

Also check out:

Conventional Financing Mortgage Program Overview/Updates

FHA Financing Mortgage Program Overview/Updates

Georgia Dream Down Payment Assistance Program Overview/Updates

HomePath Financing Mortgage Program Overview/Updates

USDA Financing Mortgage Program Updates  

Programs Include:

• Conventional (Fannie Mae & Freddie Mac)
• Fannie Mae HomePath - #1 Volume Retail Lender
• FHA
• FHA 203K Renovation Loans (Streamline or Consultant)
• Georgia Dream Down Payment Assistance
• Jumbo
• USDA
• VA
• Conventional Condo Project Approvals
• FHA DELRAP / HRAP Condo Project Approvals

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Rodney Mason is a Sr Loan Officer located in Atlanta, GA.  He is also 203K Renovation Loan and HomePath REO Property Specialist.  He can be reached at (404) 591-2453.

Providing financing for cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.


Providing financing for cities across Alabama including: Alabama Port, Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma, Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.

 

               

NMLS #151088 - Licensed in AL & GA.