Comments on: Major Credit Score Rate Adjustments — The Hits Keep Coming

By: FHA Jumbo | Rain City Guide

FHA Jumbo | Rain City Guide — Sat, 18 Oct 2008 15:05:02 +0000

[...] FHA does not have credit score risked based pricing for credit scores above 620. (Lenders may have their own risk based pricing for credit scores under [...]

By: Mortgage Rates on a Summer Day & Adverse Market Pricing | Seattle Real Estate ~ Rain City Guide

Fri, 15 Aug 2008 21:00:49 +0000

[...] to value 60.01 – 75% (no changes w/Fannie’s LLPA, check out my previous post for the hits. Fannie added more loan to value brackets for their adverse market [...]

By: Rhonda Porter

Rhonda Porter — Wed, 13 Aug 2008 20:32:06 +0000

Fannie and Freddie are adjusting the hits again…lenders have all ready factored this into rates as Fannie’s LLPA adjustments are effective on loans delivered to Fannie 10/1/2008 and later.

By: Just How Much Your Credit Score Impacts Your Interest Rate | Rain City Guide | A Seattle Real Estate Blog...

Fri, 18 Apr 2008 16:35:58 +0000

[...] Of course a borrower with a 719 or less credit score could always pay more in fee (points) to have the same rate as the 720 credit score borrower. [...]

By: Michael Brown

Michael Brown — Mon, 31 Mar 2008 20:37:46 +0000

I think that there could be a real concern for someone in that area. If the client has made all his payments and they restrict AND they create an “artificially” low credit score, that could lead to higher borrowing costs for those clients through no fault of their own.

I am wondering who get sued there? It could be a huge deal depending on how they lenders decide to report it. Our industry becomes more interesting every day…..

By: Rhonda Porter

Rhonda Porter — Mon, 31 Mar 2008 20:37:27 +0000

Beth-NY, I agree for the most part. It’s tough for home owners who need to refi but did not manage their credit, or had unexpected circumstances (health, job, etc)…and now they’re in a tough position. FHA will help many but not unless it makes sense.

By: Rhonda Porter

Rhonda Porter — Mon, 31 Mar 2008 20:34:04 +0000

Michael Brown, yes…some helocs are being limited or cut back by banks. This can impact your credit score if for example, you had a $100k limit and you’ve used $30,000. This would show a 30% limit being used; however if the bank decides they want to limit their risk (regardless of if the borrower has paid on time) and they cut the line back to $50k; you’re now at 60% ltv–which would ding your score. If they close your line and cut you back to 30k…you have at 100% of your limit.

Borrowers should be careful when writing checks from their helocs to make sure they still have access. Imagine writing a check and learning that it’s no good.

By: Michael Brown

Michael Brown — Sun, 30 Mar 2008 17:18:27 +0000

This may be slightly off topic, but it dove tails into credit scoring. I am interested if anyone has run into this yet. I have heard that some of the second mortgage companies have restricted access to clients HELOCs in some “declining markets”. This is even if you have never missed a payment! I wonder how the lenders are reporting this to the credit companies, if at all. It could have a significant impact on someone’s credit score. In the past, if someone was deliquent, the credit would reduce the available credit to 0 and the account woudl show as overlimit until paid off. If they reported this way to someone who had excellent credit, I could smell lawsuit for damages and impact to credit score….

Has anyone seen/heard of how lenders are reporting these “restrictions”?

By: Beth-NY

Beth-NY — Sat, 29 Mar 2008 22:53:27 +0000

What I can wrap my head around is raising the rate is an already lean economy. These programs were implement to help middle class Americans buy their homes, now they are punishing those same people. I’m sure we would all love to have a credit score of 750 but this is real life and thing do happen, some months you have to chose between paying the electric bill or the visa. Fortunately for me those months are rare and my credit is good but others don’t have that stability and I think it shameful for these foundations to take advantage of them.

By: Rhonda Porter

Rhonda Porter — Thu, 20 Mar 2008 13:03:44 +0000

Worried in New England, the best thing you can do is to check in with your loan originator. Ask them if you are still approved. Most lenders will allow longer than 30 day locks.