NAMB industry alert: Changes at Experian and Equifax expected to increase costs and decrease access to credit for marginal borrowersMortgagePress.comNAMB, Experian, Equifax, credit reports, non-prime borrowers
Beginning Jan. 1, 2007, new Experian and Equifax fee structures
are scheduled to be implemented that will increase the cost of
obtaining consumer credit reports and will likely restrict a
marginal (non-prime) borrowers access to credit.
Currently, each time you access and submit a consumers credit
report to multiple wholesale lenders, in an effort to find funding
for your consumer, you pay only once for that report. Beginning in
2007, Experian and Equifax will charge you for each submission and
release of your consumers credit report. You will have to absorb
these costs, which will range from $8 per loan application to
possibly upwards of $200, or pass the additional expense on to your
borrower.
The National Association of Mortgage Brokers believes that this
significant increase in costs will ultimately limit a consumers
ability to comparison shop for loans and will likely have a
profound effect on marginal (non-prime) borrowers access to credit.
NAMB is very concerned about this increase in the cost of obtaining
credit reports for consumers, and is alerting you now so that you
can prepare for these costs to potentially double, triple or even
quadruple at the beginning of 2007.
The new reissue/secondary use policy is expected to generate
significant revenue for both Experian and Equifax, by increasing
the number of transactions for which credit reissue fees will be
charged. Experian and Equifax will be the only beneficiaries of the
revenue generated by this shift in policy, and because of their
dominant status in the marketplace, they will be able to increase
their volume of business, with no additional cost, and without
providing any benefit to consumers or the mortgage industry.
NAMB is working to educate all parties involved about the
serious concerns raised by this new policy and fee structure;
namely, the unnecessary increase in consumer credit costs without
any residual benefit to the consumer, as well as the possibility
that non-prime, first-time and minority homebuyers will be denied
access to affordable credit.
For more information, e-mail
[email protected].
