Common use of Credit Report Clause in Contracts

Credit Report. ‌ The Borrower’s credit history must be re-verified for all loans chosen via the random selection process (and targeted as applicable). For these loans, a new tri-merged credit report is required to be secured. If the Borrower’s credit history was evaluated by using nontraditional credit or a nontraditional mortgage credit report, the PFI must reverify each of the credit references on that report. If the PFI obtained written references from creditors, the PFI’s QC review process must include reverification of each of these written credit references. The new and original reports must be compared for discrepancies or the existence of any debt that may not have been taken into account when the loan was underwritten. The PFI must also review any “potential red flag” messages appearing on the report from the AUS if the loan was underwritten with DU or Loan Product Advisor®, or any other alerts created by sources other than the AUS associated with the credit report to ensure all messages have been addressed and documented, and that the loan is eligible for delivery under the MPF Program. The documentation must be retained in the Mortgage Loan File or in the PFI’s QC records.