Loan

[houndbrown]

We are pre-approved for a mortgage loan with the developer's mortgage broker, building a new home.We don't expect to go to settlement until end of July. Our credit reports were pulled by lender 07/29/2013, we expected them to be refreshed 30-45 days before settlement. We are in a jumbo loan, down payment of 20%. In order to not have second loan or PMI we need a credit score of 720 per lender. We are working on lowering debt ratio. Middle score of 683 as of today; lender pulled our credit reports without telling us on 02/05/2013. (I have a credit monitoring service which informed me of inquiry.) How much of a negative impact will this have on credit score at closing? (Two inquiries within 6 months of settlement.) What legal recourse do I have? I told lender I was monitoring credit bureaus for my wife and self in previous meetings..

[ShanetheMortgageMan]

The lender likely re-checked credit because the previous report expired and in order to keep your file open (and not start over) they needed a new credit report.  Not sure if you have any legal recourse, as lenders usually check credit at the beginning & just before funding.  Personally I'd feel wrong if I didn't get an OK before re-checking someone's credit, but not sure if it's a legal requirement for me to do so.  Usually will lose a few points, each month it should regain a point or two.

[houndbrown]

Right, I understand checking at the beginning and before funding but we're 5 months out from closing and I made the broker aware of my report credit monitoring service. The lender has stated he has several programs he can put us in, of course if we don't qualify for certain programs because of credit score we're looking at a higher interest rate. Does the lender stand to profit? (That's a rhetorical question, no response required.) I am really upset about pulling the report without asking or informing us. Does it do us any good to dispute the inquiry as we did not consent/authorize the action? One point on the credit report could make a significant and costly difference in our mortgage loan. Thanks for your response!

[J_G]

I have accounts with alls 3 CRB's and I keep my scores LOCKED. You should look into it. Transunion is really easy it has a lock and unlock buttom. And it works because I applied for a car loan last year and forgot to unlock and the bank had to call me and personally ask for my promission to pull my credit and I also had to go onto the website and unlock.  Great feature

[StartingOver10]

houndbrown, I understand your concern. However, when you applied for the mortgage you gave permission to the lender to pull your credit. Your verbal restriction doesn't over ride the written permission you gave when you signed the mortgage application. The LO should have been a little more straightforward with you IMHO about the process because the lender can't continue to maintain the application without periodically updating the credit report and other documentation.

I am sure the lender/broker is under instructions to notify the builder if there is any adverse info during the building process. We just had the holidays and many people just don't have the self control to get through the holiday's without adding to their debt which would blow their approval in many circumstances. Fortunately you didn't have that issue.  The lender/broker has to have the updated docs in their system to continue processing your mortgage app.

It isn't worth challenging the lender in a big way because you did authorize it initially by making application. If I were you and that happened to me, I would call your LO and ask what happened because you clearly put restrictions on the number of credit pulls and that way your LO will know you are very serious about future inquiries and he needs to contact you prior to the next pull. There will be another inquiry prior to completing the loan process. Find out what the time frame is so you know and it won't be a surprise.