HUD And Fannie Mae Guidelines On Credit Disputes

 Updated HUD And Fannie Mae Guidelines On Credit Disputes

Credit disputes is when a consumer looks at his or her credit report and sees errors on their credit report that should not be there.  The three giant credit reporting agencies, Experian, Equifax, and Transunion is know to make mistakes and it is recommended that all consumers check on their credit report at least once a year.  By federal law, you are allowed to receive on copy of your consumer credit report from each of the credit reporting agency by visiting annualcreditreport.com.  It is recommended that you stager the request and not order them all at once so you get one credit report every four months so you can review your credit report three types a year.  www.annualcreditreport.com will not provide you your credit score unless you pay a fee.  Your credit report will be provided for you free of charge.

There are other credit services such as Credit Karma and Equifax.com where for a monthly subscription fee, you can gain access to your credit report and these companies will notify you if there is any changes in your credit report or credit scores.

Mortgage And Credit Reports And Credit Scores

If you apply for a mortgage in 2015, your mortgage broker will ask you to complete an application and will run your credit.  Your mortgage broker will review your application as to your assets and income and debts you listed and match it with your tri-merger credit report.  One of the things your mortgage broker will look at is your credit history, especially your payment history for the last 12 months.  Most mortgage companies do not allow any 30 day late payments in the past 12 months.  When reviewing a mortgage loan applicant’s credit report, the mortgage broker will look at prior bankruptcies, judgments, foreclosures, short sales, deed in lieu of foreclosure and credit disputes.  We will cover more on credit disputes in a later paragragh.

HUD And Fannie Mae Guidelines On Credit Disputes: Credit Scores

Credit scores are extremely important and credit scores are what determine whether the mortgage loan borrower qualifies for FHA loans, Conventional loans, VA loans, USDA loans, Jumbo mortgages, portfolio loans, and other loan programs.  Credit scores can fluctuate greatly from month to month and can easily be maneuvered by a mortgage broker.  For example, if your credit score is 570 FICO and you need a 580 FICO credit score to qualify for a 3.5% down payment FHA insured mortgage loan, there may be quick fixes to remedy this problem.  Paying down your credit cards is probably the fastest and easiest fix to boost one’s credit scores.

HUD And Fannie Mae Guidelines On Credit Disputes During Mortgage Process

Credit disputes during mortgage process can be a deal killer.  Fannie Mae and Freddie Mac do not allow any credit disputes during the mortgage approval process.  The mortgage process will be in suspense until the credit disputes  are retracted by the borrower.  With FHA, all medical credit disputes are exempted and so are medical collections.  With non-medical credit disputes, as long as the aggregate dollar amount is less than $1,000, then the credit disputes is exempted.  If the aggregate credit disputes is greater than $1,000, then the credit diputes needs to be retracted and a new credit report needs to be pulled reflecting the disputes.

Major Issues With Retracting Credit Disputes

When you retract credit disputes, be prepared to see your credit scores drop.  Sometimes retracting a credit dispute with a credit balance can drop a consumer’s credit scores by more than 50 plus points.  Prior to applying for a mortgage loan, please consult with a mortgage broker and go over your credit report and credit scores.  You should really have your credit disputes removed before you put an offer in on a home.

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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