Buyers required to get a 2nd credit check before closing!

By
Real Estate Broker/Owner with The Hilbun Team DRE# 01872559

'Mortgage giant Fannie Mae rolled out its Loan Quality Initiative (LQI) June 1, thereby forcing homebuyers to obtain mortgages based on "refreshed" credit reports or risk their closing being canceled and, in some states, their deposits forfeited.' (Inman News)

I ran across this article and it kind of shocked me that these institution's haven't been doing this from the get go!  How many of your clients have done something with their credit during escrow after you URGED them not to a THING?!  We all know what kind of trouble a buyer can get in to when they fail to follow instructions during escrow, especially when it deals with their credit.  'Do NOTHING!' is my advice to my clients.

 

I believe it's important for EVERYONE to understand that credit scores can vary week-to-week like a bad diet!  This new Loan Quality Initiative is going to hurt people, but it's necessary and it creates a check and balance system that may have saved the market getting out of control from 2004-2008. 

 

 

Comments (3)

June Piper-Brandon
Houwzer Inc - Baltimore, MD
Piecing Dreams One Home at a Time

When I go through the contract with my buyers I always tell them that they shouldn't charge anything, make any big purchases or do anything that could affect their credit during the time they are buying a house.  Banks have always had the right to check the buyers credit before settlement but not all have (they should have, but weren't) now they are drilling it into everyone that they are going to be more strict about the guidelines that have always been there.

Jun 23, 2010 02:44 AM
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

When did lenders stop pulling credit right before closing? I thought it had become very common over the past few years to pull credit again, which is why we always tell buyers not to do anything. The lenders who haven't been pulling credit are probably kicking themselves.

Jun 23, 2010 02:46 AM
Dawn A Fabiszak
Private Label Realty ( Denver metro area, Colorado - Aurora, CO
The Dawn of a New Real Estate Experience!

Craig ~ I had that happen on a transaction about 14 years ago and buyers didn't qualify and I had to put the house back on the market.  but then, it never seemed to happen again ( a second credit check).  I'm glad it is back!

Jul 11, 2010 04:49 PM