Let me ask you a question. Do you ever have customers referred to you by your Realtors or homebuilders that do not currently qualify for a mortgage because of their credit? When you do, what course of action do you take?
I find that many originators simply give a quick no and move on leaving the consumer with little to no educational information or assistance instead of asking the consumer about their credit in order to obtain a better understanding of how you may be of assistance to them. Remember, the Realtor or homebuilder that you have been building a relationship with referred them.
In May, Sen. Clair McCaskill, D.-Mo. and member of the Committee on Commerce, Science & Transportation, held an official hearing on Credit Reports: What Accuracy and Errors Mean for Consumers. During the meeting Stuart Pratt, CEO of the credit reporting industry’s trade association Consumer Data Industry Association reluctantly agreed that “as many as forty million consumers have errors on their credit report that will keep them from getting a loan.”
As a side note, three of the four senators at the hearing that day testified that they currently had a re-occurring error on their credit report. Sen. Bill Nelson, D.-Fla., stated that the “error held up the refinance of his home.”
Now we are not talking about 40 million people that didn’t pay their bills and thus they have bad credit. But 40 million people, people in your hometown, that can’t access the credit markets because of an error on their credit report. According to the five-year study provided by the Federal Trade Commission that was cited in this Senate hearing, “errors on credit reports are rampant.”
According to mortgage industry reports, 2014 is setting up to have fewer originations. As a strategy to combat this down turn in business, I encourage you to work with your referral sources to develop a strategy to provide additional assistance to credit challenged borrowers. You will find that it is not only a way to increase business but also will provide you with an opportunity to just do the right thing for someone.