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How are preforeclosure sales and deed-in-lieu of foreclosure actions identified on a credit report?

By
Real Estate Agent with wexzilla.com


How are preforeclosure sales and deed-in-lieu of foreclosure actions identified on a credit report?

 

Because there is no standard reporting for a preforeclosure sale or deed-in-lieu, the lender is responsible for reviewing the credit report, loan application, and any other information supplied by the borrower to determine whether such an action has been completed.

Preforeclosure sales may be reported as “paid in full” with a “settled for less than owed” remarks code, and the mortgage tradeline would indicate recent delinquency.

A deed-in-lieu action may be reported by a remarks code indicating such, and the lender can refer to the loan application (borrower declarations) to further determine whether the borrower has a deed-in-lieu in their credit history.

For reporting these actions on Fannie Mae loans, we require that servicers report to one of the major credit reporting agencies, but it is our policy not to direct specifically how to report various actions. For more information, please see attachments.

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