Posted by David Butler on August 01, 2003 at 11:09:45:
You are correct, and it is done all the time. And you will find more detailed discussion on this topic already existing right here in the CF Forum. You can access that by trying “credit reports”, “pulling credit”, “credit authorization” and similar terms as your key words in the “search” facility at the top of this Forum.
To be completely covered up, you would be well-advised to obtain the note holder’s signed authorization allowing you to pull the credit on his Payor, and this is what most of us do, most of the time - have the seller sign such an authorization.
That being said, each of us has our own way of doing business. My approach is generally to require the seller to provide a credit report and a completed credit application on the borrower. He should have obtained both when he originated the note, right?
Many don’t, but that’s not my fault. If they haven’t doneso, then I proceed on a case-by-case basis as to what I will do. But usually, I have had the most success by requiring seller to provide either that orignal credit report information, or by providing a new one. And depending on the circumstances, I may or may not pull one of my own prior to closing.
Hope that helps, and best wishes for your success!
David P. Butler