Medical debt that home buyers and refinancers don't know they have could be enough to prevent them from getting loans.
Rodney Anderson, executive director of Supreme Lending, a mortgage bank in Plano, Texas, calls medical debt the single-biggest problem for many borrowers. "People have no idea that they still owe small amounts which later end up on their credit report," he says.
Commonwealth Fund, a Washington-based nonprofit focused on healthcare research, says 14 million Americans have errors on their credit reports because of medical collections. Most of them involve small balances, but can cause a bank to refuse to approve a loan.
The Medical Debt Relief Act, which passed the House this fall and is now in the Senate, would remove settled medical debt from credit reports after 45 days, instead of the customary seven years.
Source: Wall Street Journal, Jessica Silver-Greenberg (12/11/2010)
This is great news for a lot of buyers
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