Fannie Mae gives transactors credit for good behavior Use of data opens door for applicants who look unqualified yet show responsible management
Are you a transactor or a revolver when it comes to your credit? Terms like these never have mattered much to home buyers seeking a mortgage. You ve probably never heard of them. Yet they are about to become more important to millions of mortgage seekers, and could even help determine whether you qualify for a mortgage in the first place.
A transactor is someone who pays off credit bills in full every month or makes more than the minimum required payment. A revolver is the opposite: Someone who routinely makes the minimum payment on credit cards and other debts, rolling balances over to the next month.
Credit industry statistical research suggests that, all other factors being equal, revolvers tend to present higher risks of future default to lenders, 上海千花网交友 especially when they are accumulating substantial unpaid balances. Transactors tend to be lower risk.
But up until now, mortgage lenders and investors had difficulty distinguishing revolvers from transactors. Credit reports told them whether you as an applicant were late on card payments, whether you defaulted on your car loan, but didn t tell them what you paid on your balances month by month over extended periods of time. They didn t reach back to show distinctive patterns and trends in your money management: Did you roll large monthly balances on three credit cards during the last six months of 2015? Are you a rate surfer, transferring balances from one account to another, always making minimum or no payments? Up until recently, traditional credit reports used in the mortgage arena weren t able to answer questions like these. Now they will.
Fannie Mae, a dominant player in the mortgage market, will soon begin evaluating how all loan applicants have managed their credit over the previous two years how much they owed in revolving debt each month, the minimum payment allowed on each debt, and how much they actually paid. Mortgage credit reports acceptable to Fannie will need to include trended credit data like this on every applicant.
As a general rule, according to Eric Rosenblatt, Fannie s vice president of credit risk analysis and modeling, the new system will benefit borrowers who regularly pay off revolving debt and should provide more creditworthy borrowers access to mortgage credit. That s a big deal.
Starting June 25, the new reach-back data will become an integral part of Fannie s automated underwriting an online system that is used by the vast majority of mortgage lenders to determine whether applicants are eligible for the loan they re seeking阿拉爱上海同城 . Two of the three national credit bureaus Equifax and TransUnion will supply two years worth o上海龙凤论坛 f continuous, month-by-month data on the credit management patterns of millions of mortgage applicants.
This should prove especially important for consumers who might not qualify for a mortgage becau[……]