credit score delivery timing
Posted By: Retired DQ
credit score delivery timing - 10/12/04 04:52 PM
We are proposing to send out the consumers' credit scores at the time of committment or denial.
When is everyone else sending them out???? Thanks.
Are you referring to the requirement under ยง609 of the FCRA for disclosure of credit scores by mortgage lenders?
BC
Posted By: Retired DQ
Re: credit score delivery timing - 10/12/04 04:56 PM
Yes
I have a meeting set up to discuss this next Monday. I understand that LaserPro has just issued a lengthly document regarding FACT Act disclosures and compliance, so as far as our Equity loans/lines are concered, I will need to see what LaserPro is offering. On the mortgage side, I need to look at their system and see what we can do. My feeling is that on the mortgage side, they should go out with the other disclosures (GFE, Initial TILA) and with denial letters. If we do a written committment, I agree that that would be the best place to send them, but I don't think we do that with all loans.
The Act states that if someone else gives the disclosures, (such as a broker?), we do not have to do it again. Have you determined how you will know that the score and the disclosure was already given in a particualr mortgage transaction?
BC
Posted By: Suzie
Re: credit score delivery timing - 10/12/04 05:18 PM
Spoke with a credit bureau rep yesterday & we can order, for a small fee, a Score Disclosure Letter, mailed by the cra directly to the consumer. This letter includes the Notice To Home Applicant & of course the credit bureau details. Little Devil, this would be done as soon as letter is ordered.
Isn't the cra obligated to provide the credit score detail? Of course if I pull a report they have no idea if it will be used for a 1-4 mortgage. As I lender, my obligation is the Notice to the Home Applicant, not the credit score detail, I think!!
Must this documentation be provided simultaneously?
Sorry, I have more questions than answers --
Posted By: Retired DQ
Re: credit score delivery timing - 10/12/04 05:58 PM
We always issue commitment letters, so I guess we would be safe to disclose it at that time...and of course with the denial notice...
Thanks both of you...
Posted By: Anonymous
Re: credit score delivery timing - 10/12/04 09:44 PM
Is this a section that will not have an implementing regulation? Or is it supposed to have one that is just not out in proposed form yet?
I am proceeding on the belief that there will be no implementing regulations for this part. At least, that is my understanding.
BC
Posted By: Moman
Re: credit score delivery timing - 10/13/04 03:27 PM
Don't forget withdrawals and files closed for incompleteness - based on what is written above, those loans would escape the notificaiton if the notice was sent with the denial or committment letter.
That is why I was considering sending it with the initial disclosures, which are mailed within 3 days of application. I think that way we will get almost everyone. I still need to figure out how we are going to address those loans where the CB is obtained by someone else, like a broker. If the broker obtains the CB but we are the one who uses it, then we have to send the notice, correct?
BC
Posted By: Anonymous
Re: credit score delivery timing - 10/14/04 06:14 PM
A related question. Are customers required to sign a form indicating that they had received their scoring information?
Posted By: Retired DQ
Re: credit score delivery timing - 10/14/04 06:47 PM
We are having them sign and return a copy along with the other paperwork. I can't find any guidance, but we'll take the precaution anyway.
Posted By: Anonymous
Re: credit score delivery timing - 10/14/04 07:38 PM
Another related question. Is anyone working on the notification to the customer if they are approved at a rate or terms less favorable than the best rates available???
Posted By: Bullseye
Re: credit score delivery timing - 10/14/04 08:24 PM
Quote:
We are having them sign and return a copy along with the other paperwork. I can't find any guidance, but we'll take the precaution anyway.
Several department heads & I met regarding this earlier & I could not get them to even consider getting this signed when I couldn't show them a requirement. Some times I think it's best to take the extra step, but I guess we aren't going to get there.
Help me out though if you could. I know we have to provide the notice to home loan applicants for consumer purpose loans secured by a 1-4, but what do we have to provide with it? The score & who it came from? Or do we also need the range of scores, date created & etc.? I talked to our CRA and they told me they are not going to be doing anything in regards to this that they aren't already doing. So, I am a little confused as to where I get the range of scores - or don't I need it???? 
Posted By: Anonymous
Re: credit score delivery timing - 10/14/04 09:13 PM
You can get the range of credit scores from the credit reporting agency from which you obtain the credit report. For Beacon 5.0 at Equifax, I believe the range is 300-850 without industry options and 250-900 with industry options. If you are using Beacon Installment, you would use the latter range.
Posted By: Retired DQ
Re: credit score delivery timing - 10/15/04 11:50 AM
Quote:
Don't forget withdrawals and files closed for incompleteness - based on what is written above, those loans would escape the notificaiton if the notice was sent with the denial or committment letter.
Thanks... I'll check with the lenders...
Posted By: Anonymous
Re: credit score delivery timing - 10/15/04 09:25 PM
Doesn't 212 amend sec 609(a) to read that a Consumer Reporting Agency shall supply to the consumer (abbreviated version) a statement and a notice which shall include - current credit score, range of possible credit scores, all of the key factors, the date created.
Why would I provide that information if the CRA is the entity required to provide. Am I a CRA? How would I know if I am?
Posted By: Anonymous
Re: credit score delivery timing - 10/15/04 10:20 PM
The way I am reading 212 facta and 609 fcra:
As a lender working with a borrower on a 1-4 re loan I am going to give them three new items: The Notice to Home Loan Applicant, the Notice of credit scores that list the 5 items, and according to 609(g)(1)(a)(ii)we would need to give the Summary of Rights of Identity Theft Victims.
Am I wrong in my reading of this? If I am wrong, what does this section mean?
Posted By: ahou
Re: credit score delivery timing - 10/18/04 02:11 PM
That is my understanding also.
Posted By: Anonymous
Re: credit score delivery timing - 10/18/04 04:12 PM
Have we been given a sample of what the "Summary of Rights of Identity Theft Victims" is going to look like? Is the final rule on this disclosure going to be included with Sec 151 of FACTA which was due on 9-4-04 but we havn't heard about yet?
Posted By: Anonymous
Re: credit score delivery timing - 10/18/04 04:52 PM
I don't know the answer to your question about the Summary of rights of ID Theft victims - I would like to know that also.
I do have another question on the items required to be provided on the credit score disclosure. Is the date the credit score was created the date the credit report is pulled?
Also, the name of the person or entity that provided the credit score or credit file upon which the credit score was created - would that be the names of all the consumer's creditors that I would need to list out?
Posted By: Retired DQ
Re: credit score delivery timing - 10/18/04 04:56 PM
Quote:
Also, the name of the person or entity that provided the credit score or credit file upon which the credit score was created - would that be the names of all the consumer's creditors that I would need to list out?
I took that to be the name of the CRA, not the individual creditors..
Posted By: Anonymous
Re: credit score delivery timing - 10/18/04 05:07 PM
Thanks. That makes sense.
If we do automatic underwriting with one of the factors being the credit score from the credit report then do I need to do something different under 609(g)(1)(B) Disclosures in case of automated underwriting system?
If states we can satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors. What is the difference between this and the Credit Score Disclosure. Also, I think I would still need to give the Summary of rights of ID Theft Victims and the Notice to Home Loan Applicants even if I am using an automated underwriting system. If someone could clarify that for me, I would appreciate it. Thank you
Posted By: Anonymous
Re: credit score delivery timing - 10/18/04 07:42 PM
Are you still a "home loan applicant" if you have withdrawn your application? If we just send the 212 Credit Score Notice with our approval and denial letters haven't we covered all "applicants"?
Posted By: Anonymous
Re: credit score delivery timing - 10/19/04 01:26 PM
Regarding delivery of the "Summary of Rights of Identity Theft Victims", FCRA Sec 609(d), FACT Sec 151(d)(2) says it is given out by a CRA when a consumer contacts it regarding identity theft, etc. Because of this, I see the delivery of this specific summary as the sole responsibility of the CRAs.
Also, this new Summary, along with a FACT-revised summary of general consumer rights and two FACT-revised notices, "Obligations of Furnishers Under the FCRA" and "Obligations of Users Under the FCRA" were published in the Federal Register Friday, July 16th, pages 42616-42626.
Written comments were requested by Aug 26th and no final rule making has been presented to date.
These summaries and notices cover 'every aspect' of the FACT Act ....
Posted By: Nanwa
Re: credit score delivery timing - 10/20/04 07:55 PM
OK, we are a very small bank. Under $100 million. We are NOT a consumer reporting agency for FCRA. When we make a loan, we look at the customer's income and repayment ability, delinquencies of past debts, value of collateral, depsoit history with our bank, etc. We do not use a credit scoring process of our own, and the CRA's credit score may or may not be a factor in our decision. Are we required to provide a Notice to Home Applicants and a Notice of Credit Scores?
Posted By: Comply 101
Re: credit score delivery timing - 10/20/04 09:00 PM
Any lender who uses a consumer credit score in connection with an application by consumer for closed or open end loan for consumer purpose secured by 1 to 4 units of residential property shall provide the credit score. I would interpret that to mean if you don't use the credit score in any way (check your loan policies), you don't need to give consumer their score or explain it.
Posted By: ToTo
Re: credit score delivery timing - 10/21/04 03:11 PM
At yesterday's BOL FACT act webinar the advice was given that if you get a credit score, even if you don't use it, you should give the notice. How will you prove you didn't use it? The rest of the advice was, if you don't use it, contact the credit bureau and have them remove it from the credit reports you receive.
Posted By: travelgirl
Re: credit score delivery timing - 10/21/04 09:37 PM
I have another Section 212 related question. Are we required to give the "Notice to Home Loan Applicants" if we USE a credit score in connection with the application or only if we OBTAIN it? My interpretation from the law is that we would have to provide it if we USE a credit score for these types of loans (open/closed end secured by 1-4 family). What about the "Credit Score Notice"? Are we required to give it if we USE a credit score or only OBTAIN a credit score. Again it looks like the law in section 212 states if we USE it, but in looking over my notes from yesterday's webinar it states if we OBTAIN a credit score we must give this notice. Any suggestions on the definition of use? We do not use credit scores in making loan decisions even though they appear on the credit report. Would we need to give these notices if we don't use them?
Posted By: Retired DQ
Re: credit score delivery timing - 12/02/04 04:45 PM
"Notice May NOT Be Included in TILA Disclosures
One thing the statute prohibits is including the notice in the initial disclosures under the Truth in Lending Act. Whenever and however you do provide the notice, you must do it in a way that is clear and conspicuous, but not, in any event, with the TILA initial disclosures."
From BOL article... We want to send our credit score disclosures out with our TILAs, etc. Does anyone know where I can find this part of the statute? I've looked and loooked...
Posted By: Reads Regs
Re: credit score delivery timing - 12/02/04 04:54 PM
I think this has to do with the section 217 disclosures regarding negative information. See section 623(a)(7)(B)(ii) of the amended FCRA.
"(B) Time of notice.
(i) In general. The notice required under subparagraph (A) shall be provided to the customer prior to, or no later than 30 days after, furnishing the negative information to a consumer reporting agency described in section 603(p).
(ii) Coordination with new account disclosures. If the notice is provided to the customer prior to furnishing the negative information to a consumer reporting agency, the notice may not be included in the initial disclosures provided under section 127(a) of the Truth in Lending Act ."
Section 127 of TILA deals with open end credit plans.
Posted By: Retired DQ
Re: credit score delivery timing - 12/02/04 05:04 PM
I found it, thanks, I hate it when I second guess myself!
Posted By: Truffle Royale
Re: credit score delivery timing - 12/02/04 06:54 PM
Quote:
I think this has to do with the section 217 disclosures regarding negative information . See section 623(a)(7)(B)(ii) of the amended FCRA.
"(B) Time of notice.
(i) In general. The notice required under subparagraph (A) shall be provided to the customer prior to, or no later than 30 days after, furnishing the negative information to a consumer reporting agency described in section 603(p).
(ii) Coordination with new account disclosures. If the notice is provided to the customer prior to furnishing the negative information to a consumer reporting agency, the notice may not be included in the initial disclosures provided under section 127(a) of the Truth in Lending Act ."
Section 127 of TILA deals with open end credit plans.
So am I correct that the Notice to Home Loan Applicant and Disclosure of Credit Score Information CAN go out in the same envelope as the TIL and GFE?
Posted By: Retired DQ
Re: credit score delivery timing - 12/02/04 07:12 PM
I couldn't find anything expressly prohibiting it.
Posted By: Truffle Royale
Re: credit score delivery timing - 12/02/04 07:33 PM
Thanks. I can't either so I'm recommending we send the stuff together so we know it (1) all goes out and (2) in a timely fashion.
Posted By: renniks
Re: credit score delivery timing - 12/03/04 02:06 PM
We are also sending this disclosure and credit score with the initial disclosures.
Posted By: Dan Persfull
Re: credit score delivery timing - 12/03/04 02:18 PM
Quote:
So am I correct that the Notice to Home Loan Applicant and Disclosure of Credit Score Information CAN go out in the same envelope as the TIL and GFE?
IMO yes. And it is also my opinion you can send the 217 notice in the same envelope. As was previously mention 127(a) deals with the initial disclosures for open-end credit. My reading of this is the 217 disclosure cannot be included (embedded) within the 127(a) disclosure, but I see no problem sending a separate clear and conspicuous disclosure with the materials.