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Even though we have been seeing very low interest rates for some time now, it does not mean that lenders haven’t been putting potential homeowners through hoops of fire. The many hang-ups being reported throughout the country on various tiny little nuances is a list that keeps growing longer. For example, a borrower in Michigan was recently forced to prove his motivation for selling his home and wanting to buy in Florida. The lender was finally satisfied after receiving a photograph of the sub-zero thermostat sent by the borrower, demonstrating the desire to move somewhere warmer.
The point is that just when you think lenders are going to be reasonable again, they raise the bar on the seemingly ridiculous requirements in order to borrow. You cannot really blame them though, given the intense mortgage meltdown crisis that finally brought all “good things” crashing down in 2007. But how far can we expect them to go?
Prying Eyes Provides Lenders With Transparent Access to Almost Everything
You may have heard the company name CoreLogic, its services have traditionally been to provide lenders with a consolidated version of all credit reports from the three main agencies. But there is a new product available through the company that is going to change the face of lending practices across the board. The CoreScore credit report will include a far more detailed glimpse into the lives of those wanting to borrow to purchase a home. Though the company is currently working with FICO to develop the exact formula by which consumers’ data will be measured and quantified for consumers’ sake, it is already available to lenders. Once there is a formula in place consumers will be able to access the report online without any charge. The report is available now by contacting the company directly and sharing proof of identity, including name, social security number, date of birth and addresses.
How This Will Impact Borrowers Looking for a New Mortgage
Most people know that when a credit report is pulled and viewed by a potential lender, the information contained on the report usually includes any lending history – such as previous loans on a home, vehicle loans, credit card accounts and other forms of revolving credit and student loan history as well. In addition to that, bankruptcies and settlements on debt are also included on the report and each time a request is sent to the credit reporting agencies, the inquiry shows up on the report.
With the new CoreScore credit report there will be a wider scope of information available for review. Housing payment history for those who have rented in the past will appear on the report, including any missed payments regardless of whether they are disputed or a matter of tenant negligence. Eviction records, property tax liens and also homeownership fee payment history will be available for lenders to review in detail. All this shares a very broad perspective on the potential lender’s financial responsibility level in things that go beyond the traditional credit report. Any applications for loans that go against paychecks plus child support and other court judgments will also be included on the report. One way that could potentially hurt otherwise viable applicants is the capability for lenders to see the value of real estate property currently owned – providing them an avenue to raise interest rates if values are lower than the borrowed amount.
Since most of this information stems of publicly available records, there is a higher probability of inaccuracy however consumers will be able to provide explanation for items on the report. Still, the information is pulled and ready for lenders review as early as three weeks from the date of a new transaction – as much as two months faster than traditional credit bureau reporting lead times. Boasting a current database of 1 billion records that cover virtually the entire US population, CoreLogic is two steps ahead. It seems this type of credit reporting could become the norm for lending practices as we progress further into the New Year and beyond but it is important for consumers to understand their rights. Here is more information about this product, directly from the company’s website.
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The main thing to keep in mind is that like with any other negative data on a credit report, the potential for a less-than-optimal interest rate exists. The best way to combat that is to request a copy of the report at regular intervals and periodically review it for any erroneous information. Once corrected on the report itself you should also provide your loan officer with a detailed explanation for any misrepresented items on the report. And now that you know somebody’s watching you, you will surely be careful with every move you make!
