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#226031 - 11/05/04 03:55 PM
Re: Notice of Credit Score - Dec 1st?
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Gold Star
Joined: May 2004
Posts: 274
New England
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Quote:
If YOU use the credit score, you must provide the required information to the consumer(s).
Can you tell me where you located this information? Section 212 appears to refer to the consumer reporting agency.
Thank you.
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#226032 - 11/05/04 04:08 PM
Re: Notice of Credit Score - Dec 1st?
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Quote:
Jay-Risk,
If YOU use the credit score, you must provide the required information to the consumer(s). The consumer can also request the information from the credit reporting agency. At that time the CRA must also provide information (although in reading subsection (f), it appears the CRA has to supply more information than the "Users" (that's us) do. I think the CRA's can also charge a fee for this request..a "reasonable fee"...A notice of proposed rulemaking was just issued requesting comments on what should be a "reasonable fee."
We too use ARTA lending. Since it appears the CRA's will not be including/adding the "notice to Home loan Applicant" or "Credit Score Notice" as part of the regular process (even though I wish they would. I would even pay a small fee for it), we are looking at using the ARTA form or creating one of our own. Does anyone have any suggestions for efficiently filling in the Key Factors...I just don't see our staff taking the factors of the credit report and either typing or writing them on the disclosure...Now I haven't used the form in ARTA to know if there are check boxes giving factor choices and then the choices you've selected come up on the form or if you just have to type in your factors..The other issue I see with this is we only use the ARTA system for our closing document preparation, not during application (we have our early TIL/RESPA disclosures all printed out ahead of time). I would suspect we would do the same for this notice.
Is anyone considering creating their own (shouldn't be too hard) and having check boxes for the key factors. The staff could then just check off the ones that apply. Does anyone know how many possible or commonly used factors there are. I have left 2 messages with my Credit bureau rep this week to ask, but have received no call back...what a surprise!
Any suggestions/input?
#1, I agree with Travel Girl regarding the order of responsiblity. We have to supply the scoring information to the mortgage applicant, and not at their request. The CRA's are required to supply it, upon request, and intend on charging for it.
#2, Travel Girl, at this point, I am planning on having a check list of the most common with "other" at the bottom if something comes out that isn't among the "common"...I am working on that today to gather various reports and pull this information for our form.
As far as disclosing this info "as soon as reasonably practicable"...we have not determined at what point we will provide this and whether our loan doc platform or LOA's will be responsible yet.
_________________________
My opinion only. Not legal advice.
Say you'll haunt me - Stone Sour
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#226033 - 11/05/04 04:11 PM
Re: Notice of Credit Score - Dec 1st?
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Anonymous
Unregistered
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Section 609(g) of the Fair Credit Reporting Act is titled "Disclosure of credit scores by certain mortgage lenders."
Under this section it states "the lender shall provide the following to the consumer as soon as reasonably practicable: (A)(i)A copy of the information identified in subsection (f)..." Subsection (f) lists the credit score, range of scores, 4 key factors affecting it, date pulled, and name of company providing the score.
The section also gives sample language for a notice to the customer explaining credit scores. In the first paragraph it says "In connection with your application for a home loan, the lender must disclose to you the score that a consumer reporting agency distributed to users and the lender used in connection with your home loan, and the key factors affecting your credit scores."
Based on the above, it appears to me that the bank has to give the credit score information along with the notice. Our problem is our forms vendor's disclosure only includes the notice, without any place for the credit score information. At this point, we are thinking about providing the notice, copying the page of the credit report that lists the credit score information, stapling both together, providing it and having all applicant(s) to sign it, and retaining a copy in file.
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#226034 - 11/05/04 07:02 PM
Re: Notice of Credit Score - Dec 1st?
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Anonymous
Unregistered
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I was reading the regulation a little closer, and found where 609(g)(1)(E) states "This subsection shall not require any person to - (ii)disclose any information other than a credit score or key factors, as defined in subsection (f)." So it doesn't look like we have to give the range of scores, date pulled, or company that generated the score.
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#226035 - 11/05/04 07:52 PM
Re: Notice of Credit Score - Dec 1st?
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Anonymous
Unregistered
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Our credit report provider isn't going to provide a convenient way of giving applicants their credit score information. In the case of a denial can we put the information on the Adverse Action Notice in the Principal reasons for denial? That form already combines the FCRA denial notice and gives the name of the credit bureau we used. Reg. B also already requires us to give information about credit scores and reasons for adverse action. So it looks like I can just use this form instead of creating a new one.
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#226038 - 11/05/04 08:11 PM
Re: Notice of Credit Score - Dec 1st?
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Power Poster
Joined: May 2001
Posts: 8,458
Somewhere
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#226039 - 11/05/04 08:31 PM
Re: Notice of Credit Score - Dec 1st?
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100 Club
Joined: Jan 2004
Posts: 121
Rural Minnesota
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travelgirl - We too use ARTA. I know that they are making available the general notice to home loan applicants, but they have told me that they do not plan to make the credit score notice available. Another BOL user supplied me with a template she had developed for the credit score notice, which I have modified to suit our purposes. It contains boxes that can be checked for the various key factors. If you would like a copy, please provide email address. I would be happy to share it, since another user was gracious enough to do the same for me. After all, we are fighting the same battle.
Although ARTA is making available the general notice, I may just use the Word document of this notice that I typed up. I think this might be the easiest method for our lenders, since they will be sending the 2 notices out together, during the underwriting process, and having a bunch of them pre-printed and stapled together might be the best way to go. I don't think acessing the form on ARTA, when the accompanying credit score notice is not available there, is the most efficient way to handle this.
I would be interested in how others are going to provide?
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#226040 - 11/05/04 08:40 PM
Re: Notice of Credit Score - Dec 1st?
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Gold Star
Joined: May 2004
Posts: 274
New England
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Quote:
At a recent compliance seminar about the FactAct it was stated that if you don't use the credit score but it shows up on your credit reports, you better be able to prove to the examiners that you are not using it.
Bingo.
I think this is the key point of the entire issue. If you are receiving a third-party provided report from a nationwide consumer reporting agency, then it is not going to be believable that you didn't use the FICO credit score as one criterion in your underwriting due-diligence process. It smacks of avoidance in providing the credit score disclosure. If you're not using the credit score, then you should not be receiving the credit scores on your third-party provided reports. The provider should omit or expunge the scores before they're provided. A visible score means you're able to factor the information into the credit-granting decision, and using double-speak will only cause problems with consumers and the examiners. The point of the FACT Act is to let consumers see the score -- which has long been seen as fuzzy math provided from a black box. If you're receiving it, the argument can be made that you have it available to use.
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#226041 - 11/05/04 09:50 PM
Re: Notice of Credit Score - Dec 1st?
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Anonymous
Unregistered
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I tried posting this question before but I didn't see it show up so I must have done something wrong. Does anyone know if the credit score information can be combined with the information on the Adverse Action Notice when we deny a loan. It looks like we already have to provide the reasons that adversely affected the credit score and the credit bureau on the Adverse Action Notice. If we add the credit score to the Adverse Action Notice it looks like I can omit an additional document when we do a denial.
Anybody got any thoughts on this?
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#226042 - 11/08/04 03:24 PM
Re: Notice of Credit Score - Dec 1st?
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100 Club
Joined: Nov 2003
Posts: 181
Springfield, Illinois (Souther...
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We use ARTA too, I have a copy of the general notice. But I would really be interested in the word document of credit score reasons. If you could please email it to me, I would appreciate it. Thanks. Bridget Castle bcastle@ucbbank.com
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bcastle CRCM
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#226043 - 11/11/04 07:00 PM
Re: Notice of Credit Score - Dec 1st?
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New Poster
Joined: Nov 2004
Posts: 1
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Does anyone know (for mortgage loans) whether compliance with FACT Act credit score disclosure fully satisfies the similar disclosure required under California law (I know that FACT Act doesn't preempt California law for this purpose)?
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#226044 - 11/11/04 10:16 PM
Re: Notice of Credit Score - Dec 1st?
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Anonymous
Unregistered
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Can anyone tell me if we have to discolse credit score information on construction loans.
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#226045 - 11/12/04 11:32 AM
Re: Notice of Credit Score - Dec 1st?
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100 Club
Joined: Apr 2004
Posts: 161
The hat rack
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I noticed a lot of posts stating only 4 key factors are to be listed; but, at the Kirchman seminar it was stated up to 5 factors may be required. The reg itself states that total number shall be limited to four with the exception that if one is due to "number of inquiries" that factor must be listed without regard to numerical limitation. Is anyone allowing for 5 key factors if this situation occurs?
Last edited by sansan; 11/12/04 11:39 AM.
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#226046 - 11/12/04 03:14 PM
Re: Notice of Credit Score - Dec 1st?
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Power Poster
Joined: Oct 2001
Posts: 5,564
Clintonville, WI, USA
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Are you sure they weren't confusing the 5 "points" with 5 key factors? The 5 "points" that need to be disclosed are credit score, range of scores, key factors, name of credit bureau and date.
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#226047 - 11/12/04 04:42 PM
Re: Notice of Credit Score - Dec 1st?
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Nanwa, that applies to the CRA's disclosure...not to ours.
_________________________
My opinion only. Not legal advice.
Say you'll haunt me - Stone Sour
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#226049 - 11/15/04 03:23 PM
Re: Notice of Credit Score - Dec 1st?
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Anonymous
Unregistered
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Quote:
I noticed a lot of posts stating only 4 key factors are to be listed; but, at the Kirchman seminar it was stated up to 5 factors may be required. The reg itself states that total number shall be limited to four with the exception that if one is due to "number of inquiries" that factor must be listed without regard to numerical limitation. Is anyone allowing for 5 key factors if this situation occurs?
I've not seen a report yet that listed more than 4, however they way my form is set up..the LOA will just check any that apply that are listed under the beacon score.
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#226051 - 11/16/04 02:58 AM
Re: Notice of Credit Score - Dec 1st?
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Anonymous
Unregistered
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We only do HELs and HELOCs and do not use credit scores in our underwriting. Neither do we receive credit scores in the reports we get from the CRAs, this feature was turned off. For this reason, I did not place any procedure to disclose credit scores. Is this right?
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#226052 - 11/16/04 02:21 PM
Re: Notice of Credit Score - Dec 1st?
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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I would agree you are right..you can't disclose what does not exist!
_________________________
My opinion only. Not legal advice.
Say you'll haunt me - Stone Sour
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#226053 - 11/16/04 02:56 PM
Re: Notice of Credit Score - Dec 1st?
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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I have been talking with Joker about these disclosures. I was wondering if anyone was going to retain proof the disclosure was forwarded to the customer or are you just going to have it in your procedures?
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My Opinions Only
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#226054 - 11/16/04 09:03 PM
Re: Notice of Credit Score - Dec 1st?
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100 Club
Joined: Jan 2004
Posts: 121
Rural Minnesota
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We are going to retain a file copy to support that it was provided. In the case of denials, a copy will be attached to the denial form that we retain.
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My opinions are definitely my own; who else would want them!
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