Credit monitoring strikes again –

Eleven years ago when I started in the business, a credit report would be pulled at the beginning of the loan process and the figures on that report were good for 90 days.

From time-to-time, on a high risk transaction, an underwriter would require a ‘date-down’ on the credit report prior to closing the deal to ensure that no new debts had surfaced.

However, in our current lending environment, an environment which borders on paranoia, lenders are starting to subscribe to advanced credit monitoring services.

These services, without re-pulling the consumer’s credit report during the loan process, will monitor a consumers credit on a daily basis.  These monitoring services are looking for any new debt or duplicate mortgage applications.

If, at anytime during the loan process, the borrower establishes any type of new credit or applies for another loan, the lender will be notified immediately.

In addition to potentially putting a borrower’s deal at risk, each time a credit servicing company notifies the lender of a potential change to the borrower’s credit profile, the deal has to go back through the underwriting process.  At a minimum this wastes 48-72 hours in what is already a very condensed escrow time-line.

As I mentioned here, if you are buying a new home, be sure that you do not apply for any new credit during escrow.  Hold off on buying that new car or getting that 0% Best Buy credit card until after you close on the purchase of your new home.

As always, if you have questions, you can reach me at TrustYourLender@gmail.com