Mortgage News: A New Credit Policy Coming Soon
An impactful change will take place on July 1st with borrowers credit scores and the process of reviewing credit scores. The three national credit bureaus – Equifax, Experian, and Transunion – will stop collecting and reporting civil judgement and tax lien information. Lenders and landlords will no longer be able to review any reports on tax payments or legal disputes. This could potentially be good news for the borrower, but not so much for the lender.
Many lenders feel that the new credit policy will make it difficult to determine if the applicant will be reliable when making payments on time. David H. Stevens, President and CEO of Mortgage Bankers Association (MBA), proclaimed that "blocking this information will raise some applicants credit score artificially, creating “False positives” that make individuals appear lower risk than they are.” Stevens also stated “it’s unclear whether creditors will be able to make informed decisions” when reviewing a loan applicant’s credit history”.
According to the Chicago Tribune, the credit score of new homebuyers will increase and improve to about 10 points once this new credit policy launches on July 1st.
Transitioning over to this new credit policy may be the best time for borrowers to look into purchasing their dream home. At Service First, our mortgage professionals are here to provide you with a relaxing home-buying experience. An experience you will never forget, with lenders who are willing to go above and beyond to provide you with the best customer service and a hassle-free experience. Contact one of our loan officers today to see why it’s EASIER here at Service First.
Categories: industry news