We are using Compliance One loan processing software (Wolters Kluwer) and are preparing our own Notice to Home Loan Applicant disclsorues. The credit bureau (TransUnion/Kroll Factual) only assigns codes to 4 (not 5) of the "key factors that adversely affected you score". Thus, if there is a fifth reason: "Note: In addition to the factors listed above, the number of inquiries on the consumers credit file has adversely impacted the credit score" (or sometimes it is listed as "FACTA: Inquiries impacted the credit score") since is NOT assigned a code and is therefore not being automatically picked up by Compliance One and dropped into the "Notice to Home Loan Applicant" form that is sent to the applicant(s).

I thought this 5th reason was absolutely REQUIRED to be listed on the Notice to the Home Loan Applicant"?

Management is stating that they will continue to use the automatically populated version of the Notice form as provided for in the Compliance One agreement. Thus, the 5th reason will not be listed when applicable, because there is no code assigned to it by the credit bureau so it can automatically populate the form. Essentiallly, they stated that they are relying on the Wolters Kluver guarantee that their product is correct from a compliance standpoint.

Has anyone had this issue come up during an exam or audit?

Thanks in advance for any responses.

"they stated that they are relying on the Wolters Kluver guarantee that their product is correct from a compliance standpoint"

And what do they plan to do when they get a citation in the examination? What good does the guarantee do then?

609(g)(1)(B) Disclosures in Case of Automated Underwriting System
(i) In general. If a person that is subject to this subsection uses an automated underwriting system to underwrite a loan, that person may satisfy the obligation to provide a credit score by disclosing a credit score and associated key factors supplied by a consumer reporting agency.

609(f)(9) Use of enquiries as a key factor. If a key factor that adversely affects the credit score of a consumer consists of the number of enquiries made with respect to a consumer report, that factor shall be included in the disclosure pursuant to paragraph (1)(C) without regard to the numerical limitation in such paragraph.

Thanks Randy for the insight. I guess I see the other option is to ask the credit bureau to start assigning the 5th reason a code so the automated systems like Compliance One can pick that last reason up and include it on the Notice to the Applicant.

I have a Compliance Exam beginning in two weeks. I will present this exact scenario to the EIC and I will follow-up and let BOL know, via this thread, what the response was.

Check with your IT people. I found out there was an alert from TransUnion that required an software upgrade to add the fifth factor that IT didn't deem important. I am now on TransUnion's mailing list.