Equifax Platform Monitors Borrower Activity During ‘Quiet Period’

Posted by Orb Staff on June 03, 2010 No Comments
Categories : Residential Mortgage

x Inc. says its newly launched Undisclosed Debt Monitoring platform can help lenders comply with Fannie Mae's updated policy regarding borrower liabilities. The platform monitors for and notifies financial institutions of new accounts and borrower activity initiated between the time a borrower applies for a mortgage and the time a loan closes – the ‘quiet period,’ which Equifax describes as a historical blind spot for lenders. As part of the Fannie Mae Loan Quality Initiative, mortgage lenders will have to meet additional guidelines to ensure that the borrower has the propensity and capacity to repay a debt. For loan applications dated on or after June 1, 2010, Fannie Mae will require lenders to verify at pre-funding that borrowers have not incurred new debts or liabilities that may affect their ability to fulfill a mortgage payment obligation. If additional credit was obtained up to the funding date, a borrower must be re-qualified with the monthly payment included in the debt-to-income calculation. Any debts or liabilities incurred during this period that are not reflected on the credit report or disclosed in the final loan application may subject the lender to the risk of loan repurchase. "This tool will provide us much-needed visibility into any changes affecting a client's debt profile throughout the lending process,’ says Michael Lyon, vice president of operations for Quicken Loans. ‘It also will allow us to ensure we can help our clients make wise decisions on their finances should they make changes after the initial underwriting." Undisclosed Debt Monitoring continuously monitors for new debts or liabilities incurred by the borrower during the quiet period. Through the monitoring process, the system alerts lenders of borrower activity that may represent potential risk associated with mortgage loans in their pipelines. SOURCE: [link=http://phx.corporate-ir.net/staging/phoenix.zhtml?c=92013&p=irol-newsArticle&ID=1430293&highlight= ]Equifax

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