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Disputes on Credit Report still seem to be hurting borrowers

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Everyone knows that these days, anything requiring credit is much more difficult to obtain than it was in the past, but now it seems that even when trying to correct your credit report, people are being penalized.  It seems that a very obscure policy from Fannie Mae and Freddie Mac are not only lengthening the loan process, but sometimes stopping it dead in its tracks. If your credit report has any dispute notifications at all, both Fannie Mae and Freddie Mac are not accepting the applications.

Even though the dispute may be perfectly valid, and even if it was something that was done years ago, it seems as if it does not matter. Many mortgage professionals are bewildered when perfect applicants with great debt to income ratio, credit score, and plenty of home loan to value (LTV) are turned down due to a seemingly insignificant item.

Under the FCRA or Fair Credit Reporting Act, people have the right to dispute errors that they may find on their credit report and it seems unfair that the major mortgage players are able to do this. Here at CRE we are helping many mortgage and real estate professionals get their clients in homes despite this. As far as I know we are the only company that even has an idea how to handle this. It usually takes 45 days or less and we have a money back guarantee just in case. Has this been happening to alot of the Active Rain community? We have seen these start to shoot up since late December and they continue to rise. I also haven't heard anything about Fannie and Freddie changing this policy. Hopefully they will see that penalizing people who are just trying to get their credit report straight is ridiculous!

Comments (2)

Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA

I would bet that this policy stems from borrowers submitting disputes on accounts that they know to be theirs.  This is often done in the hopes of getting it off of their report, thereby increasing their credit scores.  As in most cases, the bad apples playing the system impact everyone else. 

May 03, 2010 02:02 PM
Justynn Royal
Royal, Yates and Associates Marketing - Plano, TX

No doubt about it. The only problem with the policy is that legally, everyone has the right to dispute anything on their report and not be penalized for it. I just hate to see good people be denied for the wrong reasons.

May 06, 2010 09:47 AM