Consumer Law

Persons with Credit Disputes Can't Get Mortgages

By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

Fannie Mae and Fannie Mac currently flag any mortgage loan application where the applicant disputes something on a credit report. As reported in the AARP Bulletin, that?s causing denials for applicants, no matter the strength of their qualifications.

Loan officers report that many flagged applications get put on hold or simply denied.

?Some of these underwriters ? won?t process a loan? with the notation ?consumer disputes this item,? says Eddie Johansson, president of Credit Security Group,a credit services company in Texas.

The law is clear that a consumer has the right to dispute any inaccuracy on his or her credit report. The Equal Credit Opportunity Act prohibits discrimination against anyone for exercising a right under the FCRA.

For their part, both Fannie Mae and Freddie Mac say having a credit dispute alone should not prohibit a consumer from getting a loan approved.

Full post as published by California Credit Law Blog on January 04, 2010 (boomark / email).