Will Your Mortgage Lender Pull a New Credit Report The Day of Closing????

Mortgage and Lending with Guaranteed Rate NMLS #151088

Does Fannie Mae require a new credit report right before closing?  The answer to this question is no

It is true that many lenders are in fact pulling a new credit report the day of or just a few days prior to closing.  This is due to an mis-interpretation of an announcement that Fannie made in 2010. 

On February 26, 2010, Fannie Mae issued Lender Letter LL 2010-03 as part of its Loan Quality Initiative. Part of this initiative involves undisclosed liabilities.  The announcement read:

"Lenders are responsible for determining that all debts incurred or closed by the borrower, up to and concurrent with settlement on the subject mortgage loan, are disclosed on the final loan application that is signed by the borrower at closing. These debts must be evaluated and included in the qualification for the subject mortgage loan. Lenders must have adequate internal controls and processes to support this requirement." 

Some mortgage companies took this to read that a new credit report is required.  That was not Fannie's intention.  To further clarify its position, Fannie Mae released announcement 2010-11.  This announcement read:

"An unintended consequence of Announcement SEL-2010-01 was the misinterpretation by some lenders that Fannie Mae was implementing a new requirement that the borrower be requalified up until closing. Therefore, many lenders believed this required a new credit report just before the closing of the loan. This was not Fannie Mae's intent, and as previously stated, the intent was and continues to be to reinforce lenders' existing representations and warranties."

In lieu of pulling a new credit report, it is acceptable for an existing credit report to be used so long and it is monitor until he day of closing.  This is the most beneficial method since it does not impact the borrower's credit score.

Borrowers do need to be aware that any and all credit inquiries must be addressed before the loan can be funded.  This includes inquiries for utilities.   The opening of any new credit accounts can impact the borrower's ability to close on time.



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All mortgage lending guidelines are accurate at time of post, but are subject to change without notice.  Please call for the most current information.




Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Jim Frimmer 03/29/2011 12:19 PM
ActiveRain Community
Atlanta Real Estate Q&A
Georgia Association of REALTORS®
Huntsville Alabama
fannie mae
credt report

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Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Rodney - While Fannie may not be requiring it, some of my lending sources are doing it anyway.  Granted, some will not as long as the report on file is not older than 60 days, which is a good thing - right?

Mar 24, 2011 09:04 AM #1
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Very interesting, so interesting that I felt a need to reblog your post and to suggest it, as well.

Mar 29, 2011 12:21 PM #2
Ken Barker Realtor® GRI, E-Pro Certified
Dilbeck Real Estate - Burbank, CA

Rodney - I also agree with Donne. I thought there was a timeframe. I have had a few go beyond the 60 days and scramble last minute to get a report that we thought we did not need.

Good information though and I am here because the RE-BLOG is back, from Jim Frimmer.

Mar 29, 2011 12:31 PM #3
Rodney Mason
Guaranteed Rate - Atlanta, GA
AL, GA, SC, & TN

Donne.....You are quite correct.  There are a number of lenders requiring a new credit report right before closing. 

Jim.....Thanks for the re-blog and the suggest.  It's a topic that most dont know exists until there is an issue right at closing.

Ken.....Each lender has their own policy now on how to comply with Fannie's policy.  Some credit vendors are able to monitor a borrower's credit report until closing day.  That is the easiest since there is no new score generated to create a potential issue.  Glad you caught Jim's re-blog.

Mar 29, 2011 01:28 PM #4
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Thank you for the clarification Rodney!

Apr 01, 2011 03:26 AM #5
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Rodney --- it's really difficult confusing frustrating keeping up on the changes in lender requirements.  Thanks for keeping us updated and informed.

Apr 03, 2011 05:26 PM #6
Stephen Howell
Coldwell Banker Residential Brokerage - Annapolis, MD
Annapolis MD Homes For Sale 443-994-8043

Excellent information ... it reminds us that credit scores are a moving target ... changing all the time based on our actions ... and that loan approval, which usually comes late in the game (just be before closing) and the greatly anticipated "clear to close" ... can at the last minute get fowled up with unexpected consequences.

Jun 26, 2011 02:23 AM #7
Rodney Mason
Guaranteed Rate - Atlanta, GA
AL, GA, SC, & TN

Renee....It is very confusing. Many lenders will in fact pull a new credit report.

Michael.....Things are still ever changing.

Stephen.....They definitely are. If the buyer is working with a lender who does pull a new credit report, that closing will be iffy until closing day.

Jun 26, 2011 04:53 AM #8
Dave Sullivan
Real Estate One - Birmingham, MI
Michigan Realtor with an investor viewpoint

Well done not many in the industry know the correct answer.  I am not trying to premote anything but I did do a video on this and many in the industry have found it helpful you can view it at http://www.thecreditguy.tv/the-impact-of-an-inquiry-on-your-fico-score/

Feb 06, 2012 07:48 AM #9
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

wow, what a mess.

I was just told a story that happened last week, the fha loan was funded and the escrow was almost closed, the last day the lender called that the loan was suspended~ yep, they pulled that credit report and something changed.....:(

Dec 11, 2013 04:44 PM #10
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