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) borrower's access to credit.
Currently, each time you access and submit a consumer's 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 consumer's 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 consumer's 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].