10.3 CREDIT REPORT REQUIREMENTS (03/09/16)

© RHS HB-1-3555 SFH Guaranteed Loan Program Technical Handbook

The credit report the lender uses to assist in the assessment of credit eligibility must come from a recognized credit repository and cannot be provided by a credit reporting agency that is affiliated with the lender in any way. Credit reports can be no greater than 120 days old at loan closing. Types of credit reports include:

Automated Merged Credit Reports;
Residential Mortgage Credit Report (RMCR).

A. Automated Merged Credit ReportsAn automated merged credit report – also known as a multi-merged credit report (MMCR) or Three-Repository Merged Credit Report (TRMCR) - combines in-file credit reports from multiple repositories into a single report. A joint merged credit report includes all credit repository credit data on two individual applicants who are married to each other.The report must meet the requirements of Fannie Mae, Freddie Mac, FHA or VA, which include, but are not limited to the following requirements:

The report should include all information from three different credit repositories, or two repositories, if that is the extent of the data available for the applicant.
The report must include all credit and legal information reported for the applicant from the three (or two, if applicable) in-file credit reports not considered obsolete under the Fair Credit Reporting Act (FCRA), including information for the last seven years regarding bankruptcies, judgments, law suits, foreclosures, and tax liens.

B. Residential Mortgage Credit ReportsA residential mortgage credit report is a detailed account of the applicant's credit, employment and residency history, as well as public records information.The report must meet the requirements of Fannie Mae, Freddie Mac, FHA or VA, which include, but are not limited to the following requirements:

The report must include a certification that it meets the standards for a residential mortgage credit report.
Include a check with the creditor within 90 days of the credit report for each applicant's account with a balance.
Verify each applicant's current employment and income, if obtainable. If unable to verify and certify to the applicant's current employment, state a reason for not completing an interview with the applicant's employer.
Provide a detailed account of the applicant's employment history.

Any credit report must:

Not be more than 120 days old when the loan is closed;
Be accurate and complete;
Provide an account of the credit, residence history, and public record information for each applicant who is a party to the note;
Be submitted as an original document, either the original electronic version or the printed report delivered by the credit reporting agency;
Have no whiteouts, erasures or alterations;
Indicate the name and address of the consumer reporting agency;
Show the primary repository from which the particular information was pulled for each account listed; and
Show the name of the party ordering the report;

Lenders must order an RMCR if any of the following circumstances apply:

An applicant disputes accounts;
An applicant claims that collections, judgments, or liens reflected as open on the credit report have been paid and cannot provide separate supporting documentation;
An applicant claims that a debt shown on the credit report has a different balance and/or payment and cannot provide a statement less than 30 days old; or
The lender's underwriter determines that it would be prudent to utilize a RMCR rather than a tri-merged report to properly underwrite the loan.

If a credit report indicates other credit inquiries have been made by the applicant in the 90 days prior to the date of the credit report, the lender should determine why the inquiry was made and whether credit was obtained by the applicant.