Beth, I take it to mean if a customer applies for a loan on August 1st and comes back and applies for another loan on August 15th, you can re-use the check.

Even though a person coming back within 30 days for a different loan request is rare, we're not going there. New loan request, new credit report, period. The ONLY exception I think we might consider is when people apply jointly, the loan is denied because of one of the applicants, and the other applicant wants to re-apply alone.....course, the new loan would have to close within 30 days of the date of the credit report!

Swiggles,
We are taking the same stand as you.
I haven't let my people know it is even possible to re-use.
New request, new application, new check. PERIOD.....

I am optimistic.

I have actually always wanted this. Now, I get my way.

I'm interpreting as Farm Girl is - at application or before loan is made, not must be done at application or 30 days prior to application. Is that correct?

I am still not interpreting this to indicate the Safe Harbor is only retained if the bureau is less than 30 days old. Are others really going to pull new bureaus each time a credit report is over 30 days? Thinking of the impact specifically on lot loans.

The lot loan product seems to be the only problem. We are thinking about initially using the credit report and then if the closing is going to go past 30 days, going to the DOD website for the final check.

I agree the lot loan product is typically the only product where you would encounter this issue. All other covered loan types tend to turn around in a much shorter timeframe. I am still not interpreting the Safe Harbor to only be retained if the bureau is less than 30 days old. Is this just the conservative approach you are taking based on the ambiguity in the reg?

Swiggles, I was considering suggesting DOD check as well.
I anticipate push back if I suggested pulling a new CR if its 32 days old.
If CR is over 30 days old run a DOD check prior to closing and retain cert in file. We will stick to pulling a new CR if its over 120 days old, our bank policy.

I have been told, but have nothing concrete to rely on....that an inquiry has almost no affect on the score. It is tons of multiple inquiries that impact the score....such as a consumer applying for a bunch of different credit cards in a 180 day period.

Always hate creating unnecessary work if it isn't absolutely necessary to check if the credit report is over 30 days. The interpretive rule isn't entirely clear on the topic, but it does seem to indicate that lenders may rely on information obtained up to the time the loan is made to enjoy the safer harbor.

Absolutely do not agree.

I'm not going to recommend we change the use of credit reports if they are within acceptable time frames according to our loan policy when it is so easy to use the DOD website to verify status. It would be a whole other issue if we could only access that information using a credit report.

In fact, if I even recommended pulling another credit report if the customer comes back in that short of a time frame, I would get voted off the island!!!

I'm not even adding the check to our credit reports; we'll be going to the DOD website for every one. Isn't a hardship IMO.

We'll be using the DOD website as well.

We're going with choice of DoD or credit report at application, and if the loan doesn't close within 30 days they need to pull a new DoD search. I really don't see this being a big deal as it will probably only impact a very small handful of lot loans.

Right....because I heard it from a credit reporting agency.

Regardless of whether or not that is true....if a consumer wants a loan, it isn't our job to protect the consumer from too many inquiries. The consumer is the one driving the bus. Consumers need to understand that if they apply for a loan, a bank is going to check credit and that the score can change dramatically over a short period of time. Relying on old credit reports is just plain dangerous.

I heard this from a CRA, too. They assured us that through some analytical technique, all inquiries from various car dealerships, for example, would count as one inquiry versus the actual number, since the customer is obviously shopping for one loan.

That said, we will continue to pull a credit report with the application, but a re-check of military status will not initiate a new report.

I actually agree on both sides of the issue....yes, numerous pulls hurts the score, but if you (as a consumer) are concerned about that, i guess quit applying for so many loans...that's the way it goes.

I think a lot of that comes from unwary consumers who are bombarded with credit offers every time they try to check out at a retail store. "Would you like to apply for our card? You can save 10% on today's purchase!" Usually, the savings is granted even if the credit isn't approved. I think generally, consumers don't realize their credit score will be affected. Some end up with too many cards also affecting getting a loan. Of credit reports I have looked at, 48 inquiries in 180 days holds the record.

We will be using the DOD website at application to verify status and for lot loan will verify again when issuing the Closing Disclosure.

I'm not confident in the bureaus identifying dependents.


On a side note - why is the DOD document with ONE WORD determining whether MLA applies in a smaller more illegible font than the rest of the document.

Seems they should apply some the "12 point bolded font" to the government documents as well.

^^^THIS^^^ I TOTALLY agree. It took a few minutes to find it on the first pull! So silly that the most important part seems like an afterthought...

The Credit Bureau gets its data from the DOD database. Why would it miss a dependent if your input is correct?

I have a different scenario. We have a loan that is consumer purpose that is available online. The decision is made using account history or a credit report. It's an automated process. I contend that this is a covered product. However, there’s a debate going on with a vendor: They are saying that as long as a loan “falls below the 36% rate cap, you don’t have to do covered borrower lookups.”

According to the regulation, there are very specific exceptions to the rule. If a loan is consumer purpose, and is not any of the exceptions noted in i-iv, wouldn’t you have to verify if an applicant is a covered borrower before you could determine if MLA applied?

If the loan is under 36% certain remedies don't apply, but other requirements still do such as disclosures, correct? If the person is not a covered borrower the disclosures are moot. The MLA is moot. And you are not required to do a covered borrower look up, but to get a safe harbor protection you do and it needs to be 1 of 2 methods.

I would maintain that if the bank has an employee, single, not a dependent and that person applies for a laon, no check is necessary and the bank doesn't need a safe harbor. But those instances will be rare.