Enhancing Loan Prospector to Help You Meet New Credit Requirements
[November 14, 2007]

On November 18, we updated Loan Prospector to help you meet the new credit requirements issued by the three credit repositories (Experian, Equifax, and TransUnion), requiring that all viewers of credit data be identified on a borrower's credit report.

Credit Repositories Requirements

Earlier this year the credit repositories communicated to the credit reporting companies (CRC) changes in the industry regarding secondary use of credit. The CRC's must identify inquiries for the initial user of the credit report data and identify inquiries for subsequent users of the credit data with each credit repository for specification on the borrower's credit report.

We wanted to make our customers aware of these changes. Check with your CRC(s) for full details.

New Credit Requirement Changes in Loan Prospector

After November 18, when you submit a request to view credit for a loan transaction, Loan Prospector will continue to identify to the credit repositories and CRCs the credit viewing entity for specification on the borrower's credit report.

We are doing this by enhancing Loan Prospector to identify all entities that view a borrower's credit data in Loan Prospector and providing that information to the credit repositories and the CRCs, so they can be identified on the borrower’s credit report. This will include identifying requests for previously viewed credit data for the same loan application by secondary parties, referred to as secondary use submissions.

To address the items listed above, we made changes to the way Loan Prospector manages borrower credit data. These changes include:

• Displaying merged credit or infiles obtained in a previous submission unless critical data is changed.
• Retaining and using credit data from the most recent complete transaction.
• Matching the Merged Credit Reference Numbers (MCRNs) that are on the current submission with the MCRN on the most recent complete transaction.

To continue using credit infiles and merged credit, all Loan Prospector users must establish agreements with:

• One or more of Loan Prospector’s participating CRCs for merged credit files
• All credit repositories for infiles

Viewing Credit Data in Loan Prospector by Access Method

To ensure all users of Loan Prospector requesting credit for a loan are identified to the credit repositories and CRCs; please make sure to follow this guidance:

The credit repositories have new fees associated with the secondary use of credit report data that may be passed on to you by the CRCs.  So, beginning with your first 2008 monthly billing invoice from your CRC, you may see the new secondary credit use merged credit fees, if applicable. Timing and fees will depend on your selected CRC.

We wanted to make our customers aware of these upcoming changes. Check with your CRC(s) for full details.

Minimizing the Number of Credit Data Requests Sent to the CRCs

As of November 18, Loan Prospector continues to specify initial credit requests and will specify secondary use credit requests for the same loan application for a borrower, but by a different credit viewing entity. The enhancements will reduce unintended credit request fees allowing Loan Prospector users to reuse merged credit reports without having to request credit from the CRCs.

Key Factors When Requesting Credit in Loan Prospector

We are simplifying Loan Prospector to retain credit data for the most recent complete transactions, and decreasing credit reissue fees. After November 18, consider the following key factors when requesting credit in Loan Prospector:

• Use Merged Credit Reference Numbers when requesting credit in Loan Prospector. Currently, it is necessary in Loan Prospector to send the MCRNs only on the first submission, to avoid unnecessary reissue fees. For new loans sent to Loan Prospector after November 18, we encourage you to send the MCRNs on all resubmissions, because duplicate Reference Number fees will no longer be incurred when you resend the same MCRN on a resubmission beginning on or after November 18, as long as the critical borrower data has not changed. If the MCRN or critical borrower data has changed for any given borrower or joint pair of borrowers, Loan Prospector will request merged credit from the CRC using the MCRN provided. If the MCRN is valid at the CRC, Loan Prospector will display the reissued merged credit report. If the MCRN is invalid at the CRC, then Loan Prospector will display an error message from the CRC.
  
  

  For any submissions sent to Loan Prospector, prior to November 18, you will not incur a MCRN fee when you resubmit your loan with the MCRN to Loan Prospector between November 18 and December 31.  Your selected CRC may charge a fee for resubmissions with MCRN for loans sent to Loan Prospector prior to November 18, as of January 1, 2008.  CRCs will begin to invoice any applicable MCRN fees in February, for January transactions.
  
  You will not incur a fee for any submissions with MCRN between November 18 and December 31.

• You will experience changes in how credit is reordered if you change critical data during the assessment. If critical data changes, such as critical borrower data, Loan Prospector will obtain new infiles or merged credit if a MCRN is not present on the submission. If a loan is resubmitted with MCRN and there is a critical borrower data change, Loan Prospector will return an error message from the CRC, because the data does not match the borrower data associated with the MCRN. Loan Prospector will only retain and use credit data based on the most recent complete transaction in this assessment.
• Credit expiration for loans in Loan Prospector. The credit freshness for loans in Loan Prospector will stay the same, unless you change any of the critical borrower data. The credit freshness timelines for infiles and merged credit are:
  • Non-Construction loans – 120 days
  • Mortgages for Newly Constructed Homes Mortgages (Newly Built and Construction Conversion Mortgages) – 18 months. Merged Credit will be obtained if merged credit is requested with the AUS, or infiles if Reference Numbers are entered to access previously ordered merged credit data. If you need to resubmit, keep the same CRC, critical borrower data, and submitting entity after the first 120 days to maintain the same credit data for 18 months. Loan Prospector may obtain new credit if any of the conditions listed under resubmission occur.

If you have any questions regarding the new secondary use and or new credit requirements, please contact your CRC directly:

For more information

• Review all our upcoming changes to Loan Prospector [PDF 98K]