New Policies At Mortgage Lenders Hamper Potential Borrowers, May Be Illegal!

Potential borrowers all over the country are being turned down for home purchases solely for excerising their legal right to dispute inaccurate items on their credit report.

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New Policies At Mortgage Lenders Hamper Potential Borrowers, May Be Illegal!

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FOR IMMEDIATE RELEASE
Plano, Dallas, Allen, Texas, United States of America (Free-Press-Release.com) August 23, 2010 --Whenever a consumer finds an error on his or her credit report, they are encouraged by both the credit reporting agencies and the government to file a dispute through the normal channels. Those channels include mailing a letter, calling on the phone after purchasing a report, and going online to file an automated dispute. In theory, the credit reporting agencies will investigate the allegedly incorrect account with the lender that is reporting it and respond back to the consumer with the results. This process was established by the Fair Credit Reporting Act (FCRA) and is meant to be a way to protect consumers from unfair practices by banks and other lenders.

Another provision of this law allows for, and sometimes requires that, statements of continued dispute be placed on accounts within a consumer credit report. Again, this was envisioned as a way to further protect consumers and give them the right to add their own version of what happened with an account to their personal credit reports. Unfortunately, this part of the act is starting to cause some major headaches for potential mortgage customers all over the United States.

Since the beginning of the recent economic turmoil, banking and lending organizations have been frantically searching for ways to lower their risk without making any cuts to their profits. One way they are currently experimenting with is to punish consumers who have listed disputes on their credit reports. As of this writing, loans underwritten by Freddie Mac or Fannie Mae are being summarily rejected for having as few as one account listed as “under dispute” on a consumer credit report. In many cases, a customer does not even know that the account is under dispute. Certain types of investigations require a company to place a notice of continued disagreement even after the customer believes that the problem has been resolved. This has already resulted in thousands of disappointed people who have gone to purchase their dream home only to find out that an error they disputed years ago on a closed account is preventing them from being a viable candidate for a mortgage even though it has no impact on their score.

To make matters worse, there is no instruction manual or even clear advice available that explains how a consumer would go about removing such a comment. Within the credit reporting agencies, turnover is so high that, even if a consumer did miraculously figure out the proper way to make such a request, the inexperienced person handling the dispute would most likely not even know how to properly process it. With all of this confusion, it is easy to wonder: how it is legal for companies to arbitrarily make this a lending criteria? The answer, quite simply, is that it is probably not legal.

The FCRA is one of many laws that are collectively referred to as the Consumer Protection Laws. Another of these is the Equal Credit Opportunity Act (ECOA). The ECOA states that you cannot discriminate against someone based solely on his or her race, gender, etc. It also states that you cannot discriminate against a consumer based solely on his or her exercising their rights under the consumer protection laws. By virtually any reading or interpretation of this law, what lenders are doing when they deny a loan based on the notices of investigation is a violation of federal law. Although this means that the practice will most likely be challenged and overturned in the future, it does not give much hope to consumers right now. There is, however, hope, in the form of reputable, experienced consultants who better understand the ins and outs of the credit reporting agencies.

Although the reporting agencies and bureaus would prefer they did not exist, there are a handful of truly knowledgeable and respected credit services organizations that, through experience and research, have developed and compiled strategies and methods of assisting consumers that would be nearly impossible for a consumer to figure out on their own. In situations like this, contacting a company like CRE Credit Services, at www.crecreditservices.com , might be the only real chance a consumer has to correct the problem. CRE Credit Services has designed a proprietary process to help remove these disputes. They have already helped many clients get into homes by removing these disputes and improving their credit. CRE Credit Services has expert credit consultants ready to speak with potential borrowers or mortgage professionals and offer a no cost, no obligation consultation.

More information can be found online at http://www.CRECreditServices.com

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