Lenders may strive to keep good credit a secret - Posted by Nicole_AZ

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Posted by Joei PA on January 30, 2000 at 08:09:29:

I see this on a daily basis, but would like to add a few facts. (I know off hand of two major companies that do this)
Mortgage lenders and banks work slightly different.
The bank I was a consumer loan underwriter for (small community bank) went by general credit, score was not a major factor as 5 or so different elements were used to establish the “score”.

Mortgage lenders have different matrix’s they use. Score determines the program you fit into, how much they can lend (LTV) and max. debt ratios.

However, if your mortgage is not showing on the credit report, both will require a VOM (verification of mortgage) thus advising of the history of payments.

I know with my present company, this VOM can be used as a tool for battling it out with underwriters to obtain the best program, its not yur fault.

However, I do think it is a good idea to make this one of the questions to ask when looking for a lender.

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Lenders may strive to keep good credit a secret - Posted by Nicole_AZ

Posted by Nicole_AZ on January 29, 2000 at 21:47:03:

I found this article in today’s real estate section of the Arizona Republic newspaper. It was written by Kenneth R. Herney, managing director of the National Real Estate Development Center. I thought it was very interesting.

Due to the length of the article, I am only printing the first half here. If you would like it in it’s entirety, please email me directly and I will send you a copy.

If you’re among the millions of Americans whose credit histories aren’t quite perfect, answer these two questions:

*Have you been trying to improve your credit standing by scrupulously paying your mokrtage and credit-card bills on time every month?

*Would you be upset to learn that your solid, on-time payment performance isn’t being documented anywhere, and, therfore, won’t help you get a lower interst rate the next time you apply for a home mortgage or an equity loan?

Get ready to be upset. Federal officials and private-sector credit agencies say the practice of non-reporting of mortgage and credit card payment performances is abusive and widespread. Last week, federal financial regulators issued an advisory to the nation’s banks urging them to take defensive steps to guard against the potentially harmful effects of the practice.

Here’s what’s involved: You might assume that all your major credit transactions - how much you borrowed on your mortage, how high a limit you’ve got on your credit card- show up on your credit files. But that’s not the case, especially if you’re a homeowner with some minor dents in your past payment performances.

That’s because some mortgage lenders and creditpcard companies hide you from potential competitors. They no longer report your payment histories to the three national credit reporting bureaus: Equifax, Experian and Trans Union. They do that, according to federal officaials familiar witht he practice, to keep other lenders from knowing how solid and profitable your account is. Aggrssive lenders routinely surf through credit files electronically to identify and harvest potential prospects for home refiancings, home equity credit lines and card offers.

Among the most attractive prospects; people who are paying higher-than-market interest rates on their mortgages because of prior credit problems, but who nontehless make tgheir paymetns on time every month. Many of them expect that their on-time paymetns will help re-establish their credit records and enable them to qualify for lower rates in the future…

Again, let me know if you would like the whole of it. My email is macarle@yahoo.com