Changes next month by the credit reporting agencies aren’t expected to have a significant impact on Fannie Mae’s policies or requirements.
In July, Equifax, Experian and TransUnion will implement a public record data standard designed to improve credit report accuracy.
The planned changes, dubbed the National Consumer Assistance Plan, will eliminate most civil judgments and tax liens from credit reports.
Credit scores are expected to be minimally impacted from the change, according to the credit reporting agencies.
Foreclosure and bankruptcy reporting won’t be impacted by the changes.
In Lender Letter LL-2017-02, Fannie said that lenders can still rely on its Desktop Underwriter risk assessment and recommendation. The secondary lender said it simulated the expected results of the changes on the credit report and determined that the impact will be small.
The Washington-based firm noted that there are no changes to its policy requiring delinquent credit — including judgments and liens — to be paid off by closing.
Lenders need only rely on the loan application, credit report and preliminary title report to determine whether tax liens or civil judgments exist. No other sources are required.
“We will monitor the effects of the credit report changes to understand how they impact lenders throughout the loan origination process,” the lender letter stated. “We ask lenders to share their experiences and feedback with their Fannie Mae customer delivery team.”
