firstsource, need expert opinion

[Diamond in the Rough]

Found a beautiful home. Working with a broker and she pulled a tri-merge. Scores are as follows:569,476,529. Said she could get me 80%LTV and LTV is 130K. Have submitted all personal and business bank statements. Told me I was approved and a denial was not even a consideration. I paid for appraisal and also got title commitment. We were set to go and then she tells me that Lender advised her that they pulled credit report and that my 529 score had dropped to about 480 in a matter of two weeks. Broker said that was very strange and nearly impossible for score to drop so much in two weeks time. Said she would try to get an "exception". What could possibly be going on?

[firstsource]

Here is a long answer. to your question:

"What could be going on?"

So many things. It depends to a great degree how knowledgeable she is about credit issues. When I first got into this end of the business, I learned the hard way about getting clients qualified/approved. I sent a file to 5 or 6 lenders, and their AE"s (salespeople LO's work with) ran credit. It is a much easier way to do things, but not necessary. Several weeks went by, and we found a lender that we liked, and went with it. Due to the time involved, it was a month between 1st pull, and the final lender pull. Scores went down enough that I had to put things on hold and learn about taking off unauthorized credit inq's. So, that could be what happened. I would suggest that you run your own credit, either Privacy Guard or MyFico, and see if there are a lot of them. ***

Let's say that it is not the reason. Maybe in the recent past you have done something that will make a change. ie, opened a new charge account/s, purchased a new car, charged your cards and not paid them down that amount so your utilization changed, etc.

Maybe a new collection came up, or a charge off, or something like that.

Lastly, the credit report industry is very complicated, in the "getting report part", there are a number of "main" "wholesalers" that take the information from the EX/EQ/TU and put the report together, then they sell the info to the companies that people like me buy from.

Same Client:

11/24

1) XPN 490,EFX 521, TU-Not reporting, and won't report with them

Yesterday, another reporting agency that uses another wholesaler:

2) XPN 490, EFX 541,TU 555

I normally would rather deal with the lower numbers, so that is why I use the first guy. For all but one lender I deal with, they run their own reports and sometimes my client gets a nice surprise, when I call them with lower rate than promised.

There are other wholesalers that I don't currently deal with/through. Chances are that the lender I am giving this loan to today, will have even yet different scores, but not major different.

-------

So, as you can see, the possible reasons are many, but the first thing you should do is check your credit report. ***

Now, what to do about this?

I would "forget" about your LO being able to get an exception. It really is not something that is done, as most all lenders need the "magic" 500 to do anything. There is at least one lenders that will use the LO's credit that she ran, and will just run their own to make sure that the basics are there, and if so, will use her scores. That is dependant on how old her report is, and how soon you can close.

You don't mention what your LTV need is: there is one lender (that has obscene rates) that will give 70% LTV with 470+ score. There is another lender that deals with 150K + property, that will just look at your credit history, and go from there. They may be an option.

Charles

*** If you want to consider the finer points of the rules, and know how, you can dispute the inquiries that you did not authorize. If the lender was not sent, as part of the routine, your Borrowers Signature Authorization, You can dispute non-authorized inq.s, and that may get your score to 500+, That is one of the reasons to run your report. So, if the reason your scores dropped like that is the inq's, you may be in good shape.