I’ve written about this before, but with the summer here, and many of our clients going through the mortgage process (yea!!!) I felt it was prudent to write another piece on the Final Step of our Process.
The Removal of Dispute Comments
Basically, when we investigate the accounts that you would like us to, what appears on the credit report are ‘Dispute Comments’. It is just a natural part of the process. As Scotty mentions in the consultation, we investigate the accounts, and when we, or you, or another organization works on the credit, those comments are there.
Many lenders have to either have these comments removed, or, they alter the rate/risk model to accommodate those comments. This means you are paying more, because the lenders view you as a higher risk because of them. Here’s the formal language:
HUD 4155.1 4.C.2.f Handling of Disputed Accounts The existence of potentially inaccurate information on a borrower’s credit report resulting in a dispute must be reviewed by an underwriter. Accounts that appear as disputed on the borrower’s credit report are not considered in the credit score utilized by TOTAL Mortgage Scorecard in rating the application. Therefore, FHA requires the lender to consider them in the underwriting analysis as described below. With this ML, FHA is revising policy on manual downgrades for applications with disputed accounts to reflect the risk associated with derogatory and non-derogatory disputed accounts for factors such as age and size of outstanding balance.
So, the final step is to request the removal of those comments before a mortgage is closed. This can sometimes take a few rounds, as the bureaus tend not to remove all of them with the first request. Thusly, we always like to be kept in the loop when our clients decide to go for a mortgage. If they do not, we will inevitably get a call stating they are qualified, but need these comments removed.
So, this is the final step. If these are not removed, they will typically remain on the report.
Any questions? Let us know and please, be well!!