(20hr) Day 4 - FACTA - Case Study


Class Blog (1 of 1)
Case Study:  Always Help the Borrower  
The market is extremely volatile and seems to be changing daily. There is no insurance from one day to the next that loan programs or relied upon underwriting guidelines will be around for a day, a week, or a month. A mortgage loan originator (MLO) took an application two (2) days ago, and the borrowers’ credit score came back at 613. The minimum credit score allowed under the loan program the MLO was attempting to secure for the borrowers was six hundred and twenty (620). Seven (7) points is not that much of a hurdle to repair, so the MLO decided that it was his responsibility to hold off on telling the borrowers their score and get to work on helping them improve a few accounts impacting the scores. The MLO also didn’t want the borrowers to get cold feet if he were to tell them their credit score is less than acceptable. Two weeks later, the MLO ran the credit report again after having the borrowers write a few letters and contact a few creditors. SUCCESS—the borrowers’ credit score increased to six hundred and twenty-three (623), but sadly, the loan program was pulled by the investor.
Did the MLO do the right thing by working hard to improve the borrowers’ credit score even though they now can’t get the loan?




www.mymortgagetrainer.com

8 comments:

  1. 1 of 1
    While the actions of the MLO were done with good intention, the MLO only needed to provide the credit score(s) with 4 factors that outlined why they received that score. The MLO cannot be held reliable for the information they provide, so they should have just provided the scores, the factors, and suggested they reapply for a loan when the score meets the minimum requirements.

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  2. Its good for the MLO to go out of their way to try and help but in this circumstance the MLO violated the FACTA act provisions requiring disclosure when they were readily available.

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  3. I believe by not disclosing the credit score to the consumer, this MLO violated the FACTA requirements to disclose this information within the required number of days. It would have been better for the MLO to bring the borrowers in on this circumstance so it would have been more collaborative rather than the MLO taking all of the responsibility as well.

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  4. The MLO should have disclosed the credit score to the borrower and kept them informed not only of his intention to help them raise their score, but of the risk that the program they were applied for might not be available in the future.

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  5. Although intentions were good and they worked "hard" to help the consumer. They should have disclosed the borrowers score and the key factors to them and stated that they should reapply after the factors had been taken care of.

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  6. An MLO should always disclose the credit report to the consumer and then work with both the client in trying to repair their credit and and the lender on possible other options to extend the loan program to a later date or a new loan program.

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  7. 1 of 1

    The MLO had good intentions but regardless had violated FACTA provisions

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  8. Its always good to help our borrowers but in this case the MLO violated FACTA Act provisions

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