Your Credit Report Means Everything
One of my most recent LoanOfficer 911 cases involved a client who had a problem with his credit report. This wasn’t a story about bad credit, which can be detrimental to a borrower’s qualifications; this story is about false information reported on a clients credit report. In this case it was a public record reported inaccurately.
So as the story goes, my borrower was a Divorced Dad and had sole custody of his two children. Both children had lived with my client as their primary residence for over 5 years and my borrower had the proper documentation to prove it on his divorce decree. A divorce decree is part of the standard documentation for any borrower who is divorced and either pays or receives child supportor alimony for income or debt that is reported on their tax returns. In California, it is very common to have a borrower disclose their divorced status and provide the divorce decree at the time of application.
This decree had shown that the ex-wife had given up her right to share custody of the two children and there were a variety of reasons, which were disclosed in the court documents. What made this loan scenario special was the fact that my borrower had a ‘Public Record” recorded on his credit report from a family court outside of jurisdiction. What apparently happened, (unknown to my client) was that the ex-spouse had falsely filed a custody warrant for her two children in another courthouse outside of the county. The ex-spouse was bitter, filed a false report in retaliation to my client with no legal right to do so…
The consequences of this filing, lowered my clients FICO scores by over 50 points, and the public record on the report kept my client from getting an ‘Desktop Underwriter, or DU Approval” because the filing had produced a “Conditional Approval” status, subject to resolving the public record. This filing also acted like a dark cloud over my innocent borrower. My borrower would have never known about this public record because the ex-spouse had filed the report over 350 miles away in another county.
In summary, due to some committed leg work from my client and one long drive to an out f town court house; we were able to resolve the credit issue and close the loan on time. However, the point I want to share with you is a reminder; Your credit means everything. The Mortgage industry these days is overwhelmed with technology, regulations and guidelines. Nobody gave my client a chance to explain his scenario before he met me. His credit report and the other lender’s underwriting software refused him his day in court to explain his circumstances. There are no laws that could have stopped his ex-wife, or anyone for that matter file a false report on his record.
The best advice I can offer any home buyer is to get started early on your loan applicationto avoid any surprises on your credit report. Most reputable lenders, (including me) offer a free credit report when you apply for a pre-approval loan application at my website, Lo911.COM