Friday, May 3, 2013

Frustrated by Mortgage Closing Delays by an “IN DISPUTE” account?

Frustrated by Mortgage Closing Delays Caused by an Account Being “IN DISPUTE”?

by Daniel Sater – Nationally Recognized Credit Expert         631-392-8685

The mortgage industry has gone through numerous challenges, changes, and restrictions over the past 5 years but it is pure frustration to have the “IN DISPUTE” notation come up at the last minute delaying a closing, and worse, cause possible anger and frustration on the part of the home buyer.

Homebuyers Seldom Check Their Credit Before Applying for a Mortgage
This situation happens more time than we would like to see due to the mortgage application and credit pull being the first time many buyers have looked at their credit reports and scores. In the US it is estimated that about 40,000,000 credit reports have errors or misleading information on them.

It is at this point that home buyers start writing the credit bureaus or hire a professional credit repair companies to assist them in removing inaccurate, incomplete or unverifiable information from their credit report as provided for by the consumer laws. If an account isn’t deleted the “IN DISPUTE” notation will stay with it forever.

The Requirement to Remove all “IN DISPUTE” Notations
Recently, Fannie Mae and Freddie Mac have decided that this notation has skewed the FICO scores and demanded that this notation must be removed.  One of the problems is that their assumptions are wrong. There are two dispute notations; the first one is a temporary notation the credit bureau reports during investigation which suspends the scoring model from scoring the negative information. With the new software used to communicate between the bureaus and the data furnishers this may last 5 days. If the creditor verifies the information as accurate they will add a permanent notation of “IN DISPUTE”. Even with this notation the negative information is now scored!

How To Remove the “IN DISPUTE” notation quickly.
A simple letter to the creditor stating that, “This account is not in dispute. Please remove the Compliance Condition Code “XB” from reporting.”
This is the code at the credit bureau that enters on your report “Acct information disputed by consumer under FCRA” and “IN DISPUTE”. If you send a letter to the credit bureaus most likely they will refer you to the creditor and take no action.
We do this for our credit repair clients seeking a mortgage all the time, and now, any mortgage professional can do the same for their home buyer.

Daniel Sater is a Nationally Recognized Credit Expert who founded Credit Scoring Advisor, a national credit repair company specializing in Rapid Credit Repair for their clients. In addition Dan trains and Coaches numerous Credit Repair Companies across the country, he is a Speaker and Author. He last book, "The Top 20 Toxic Credit Mistakes" is available on the Credit Scoring Advisor website. He can be reached at 631-392-8685.

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