Over the last year we have seen more changes than I could even begin to explain in one blog post. One of the more difficult ones that you REALTORS may not be aware of is Fannie Mae's automated underwriting systems (desktop underwriter, DU) problems with disputed accounts.
Last year it was pointed out that if an account is in dispute DU dismisses it as being there all together. This gives a false picture of the borrower's credit file. The industry's (secondary market) fix for this is to no longer allow disputed accounts on credit reports when using this system. This is true with all loan products especially FHA and VA. Even if the account is 5 years old, is paid off, and was never late; if it is in dispute the borrower cannot qualify.
Most loan officers have been scrambling for a way to fix this problem or just denying the file. Solutions I've heard of before can take weeks or months to work out at the bureau level. Which pushes back, or virtually eliminates your closing date.
I have a method for removing disputed accounts in 10-12 hours. So your buyers won't skip a beat in the loan process.
In addition to following the advice in previous blogs I would recommend you have your clients go to www.annualcreditreport.com and pull a free Experian report. This way you can be informed of possible challenges like the one I've discussed here before you get into a contract.
While this advice is sound and will certainly help you understand your buyer's financial state more clearly. I would always advise you to refer your clients to your loan partners upon your initial contact to get pre-qualified.
Good luck to you all!
-Sean Thorson
www.corpuschristi-homeloans.com
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