There is a new potential for pain and trauma to real estate transactions in the Bay Area

There is a new potential for pain and trauma to real estate transactions in the Bay Area

There is a new potential for pain and trauma to real estate transactions all across the country.

What can cause this?

Thanks to new Federal guidelines, banks across the nation will be now pulling a NEW credit report the day of funding. How does this impact our purchase and refinance transactions? If upon reconciliation, undisclosed liabilities or credit inquiries affect the ratios by more than 2%, the approval will have to be re-run prior to closing. This will delay closings and can potentially cancel the approval on the loan.

The BORROWER,

The Borrower unless counseled properly,  buy cars, computers, lawn equipment, lumber packages, furniture, and appliances… They move debt around, apply for department store cards, and have a friend in the business check their credit score.., frequently. They apply on Lending Tree every 6 months to get 4 offers for a non-existent house.

Some borrowers believe that they are ok to “shop” for things, because they did not buy anything…yet. Unfortunately, tolerances do exist – I do not care HOW we do it…we must counsel our borrowers so they completely understand – do nothing for 90 days prior to applying for a mortgage and do nothing while the mortgage is in process. A complete understanding of the devastation that can be caused is probably the most effective way to deal with this issue.

Your support as a Real Estate Professional is greatly appreciated.

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