Credit Reports Expire in 60 Days. Realtors Be(a)ware!!

So now credit reports expire after 60 days. it really just isn't enough time!! let us say we pre-qualify a client and they have a home in mind and they just need to know if the numbers work. All is cool. it takes let us say 3 days to get an offer accepted and a home inspection scheduled. Contracts are signed by the buyer and seller within another week. we are now 1 1/2 weeks into the transaction. the client applies for a mortgage. Because of the new disclosure rules we can't spend the clients money for 3 days, so there is a 3 day delay on the ordering of the appraisal, and it takes another week to come back. We are now 3 to 4 weeks from the credit report. Now we can submit the file for underwriting. Unless the closing is too take place right away and there are absolutely NO issues with the title, seller moving out, client needing more documentation... your client most probably is closing in another 3 to 5 weeks. more than 60 days! As a mortgage professional I educate all my clients not to use their credit cards, make any large purchases or allow someone to check their credit. The problem is that even if my clients follow my instructions to the letter, what if something happens beyond their control,or what if they made a mistake, a poor error in judgment? and trust me I have tons of stories like this. I have one this week in my office, the clients score went down 75 points because he forgot to mail in his car payment and he had a 30 day late. we had to get this file closed in 7 days (closing is tomorrow).

In my office we are running credit at the 45 day point. This way if there is a problem we can do a rush closing or be able to fix the problem. i can just imagine what the Realtors would say if a closing was canceled because the credit tanked within a few days of closing, and I wonder if the client would be entitled to his down payment back if he had already provided a mortgage commitment to the seller.

There is legislation just waiting to pass which will require a credit report to be run within 3 days of a closing to insure that no new credit was initiated. I just can't wait to see how many deals die and how many rate locks will be blown because of changed credit circumstances!!