“Effective for Freddie Mac settlement dates on or after January 5, 2012, we are… Eliminating the minimum Indicator Score requirement of 620 for Relief Refinance Mortgages – Same Servicer with LTV ratios less than or equal to 80 percent, provided the principal and interest payment does not increase by more than 20 percent.”
Freddie Mac, regarding its “Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-1.”
From: Greg Fisher
Sent: Friday, April 08, 2011
To: Joshua Ruch, managing partner, Rho Capital Partners (via Courtney Guertin, media relations, Lin Media)
Cc: Susan Hogan, consumer reporter, Call 12 for Action team, WPRI
Subject: credit score employers myth, Eyewitness News, WPRI channel 12, Rho
See this message and your response at https://blog.creditscoring.com/?p=1967.
You broadcast: “So, do you think it’s fair for a potential employer to hold your credit score against you? Fair or not, it could be the deal breaker.”
Who is your source regarding credit score use by employers?
—
Greg Fisher
The Credit Scoring Site
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342
FHA (the Federal Housing Administration) reports, “For the first time the average FICO score for insured cases reached the 700 level — actually 702.”
But, somebody thinks that’s not necessarily such a great thing. The U.S. Department of Housing and Urban Development (HUD (FHA is part of HUD)) has just opened investigations resulting from complaints filed by the National Community Reinvestment Coalition (NCRC). NCRC states that its investigation “reveals that too many of the country’s largest financial institutions are refusing to lend under the FHA loan program to consumers with credit scores between 580 and 640, despite the fact that FHA policy establishes a 100% guarantee for refinance.”
However, lenders are judged by their default and claim rates, and their underwriting authority can be termintated if those rates are too high.
Also, see: Average credit score chart, FHA loans.
The NATIONAL ASSOCIATION OF REALTORS actually has a written credit policy; it is named “NAR Credit Policy.”
The sub-title is, “LENDERS, FHA, THE GSEs, AND FEDERAL REGULATORS SHOULD REASSESS AND AMEND THEIR CREDIT POLICIES SO MORE QUALIFIED BORROWERS ARE APPROVED FOR MORTGAGES”
With the Memorial Day weekend fast approaching, syndicated columnist Lew Sichelman took a shortcut.
Lew Sichelman, 2002:
Beyond that, though, proceed cautiously. One thing you don’t want to do is pay off any judgments or collections that are at least 24 months old.
Not only is this “unlikely to get you where you want to go,” [mortgage broker Ginny] Ferguson warns, it could turn an old problem the scoring software views as insignificant into a new one the program sees as much more serious.
Why? Because scores are based on the last day of activity. So if you pay off a 5-year-old credit problem, it becomes a “yesterday event” that will have a much more profound — read that “negative” — impact on your score.
Lew Sichelman, 2010:
Beyond that, though, proceed cautiously. One thing you want to be careful about is paying off any judgments or collections that are at least 24 months old. Not only is this “unlikely to get you where you want to go,” Ferguson says, it could turn an old problem the scoring software views as insignificant into a new one the program sees as much more serious.
Since scores are based on the last day of activity, paying off a five-year-old credit problem could become a “yesterday event” that will have a much more profound — read that as “negative” — impact on your score.
2002:
In a misguided attempt to improve their credit scores, too many mortgage borrowers are taking steps that end up doing more harm than good.
2010:
In a misguided attempt to improve their credit scores, too many mortgage borrowers are taking steps that end up doing more harm than good.
2002:
Among other blunders, they are paying off judgments when they don’t have to, closing out old accounts they shouldn’t and opening up new ones and unnecessarily consolidating their credit cards.
2010:
Among other blunders, they are paying off judgments when they don’t have to, closing out old accounts and opening up new ones when they shouldn’t, and unnecessarily consolidating their credit cards.
Etc., etc.
From: Greg Fisher
Sent: Friday, May 28, 2010 1:10 PM
To: Watts, Craig H
Subject: credit score, FICO, effect of paying judgment
See https://blog.creditscoring.com/?p=1257
Does paying a judgment decrease the FICO score?
H. R. 600, the FHA Seller-Financed Downpayment Reform Act of 2009, introduced by “Mr. AL GREEN of Texas (for himself, Ms. WATERS, and Mr. GARY G. MILLER of California)” uses the term “FICO score” 5 times. It is a bill “To revise the requirements for seller-financed downpayments for mortgages for single-family housing insured by the Secretary of Housing and Urban Development under title II of the National Housing Act.”
In March, 2010, Representative Green said, “Thank you very much, and thank for that new term for my vocabulary: Fake-O.” (2:13:58 in the video)
A press release (HUD No.10-016) from the U.S. Housing and Urban Development Department (HUD) Federal Housing Administration (FHA) dated January 20, 2010 is titled, “FHA Announces Policy Changes to Address Risk and Strengthen Finances.”
The release states: “New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.”