A. Sources of Credit Information
Credit Repository
A credit repository is an organization engaged in gathering, recording, updating, and storing financial and public record information concerning debt repayment histories of individuals.
Consumer Reporting Agency or Credit Bureau
A consumer reporting agency, or credit bureau, is an organization that prepares credit reports used by lenders to determine the credit and public record history of a borrower. The consumer reporting agency obtains data from the credit repositories as well as other sources.
Direct Verification
A direct verification is a payment history obtained by the lender directly from the creditor or repository. A direct verification may be obtained to verify the payment history on an account not reported on the credit report. AmMAC will obtain direct verification only to establish rental history, payment on a private (non-rated) mortgage, or on un-disclosed debts.Top of Form
B. Individual Credit Reports
Residential Mortgage Credit Report
A Residential Mortgage Credit Report (RMCR) is a detailed account of an individual's credit, employment, and residence history. The RMCR also includes any public information concerning the individual. A RMCR is prepared by a consumer reporting agency. The agency preparing a RMCR will attempt to verify information disclosed by the borrower that is not found in the credit repositories. The agency will also contact the borrower if it has incomplete information or if it discovers information that indicates the possible existence of undisclosed credit information or public records.
In-File Credit Report
An In-File Credit Report is issued by a credit repository and contains 'as is' information that has not been updated or re-verified as a result of a credit inquiry.
AmMAC requires a 3 bureau CREDCO Insta-Merge report on all loans submitted.
General Requirements
The following requirements apply to all credit reports.
Age of Report - The credit report may not be more than 90 days old at the time our loan is closed. |
Original - The credit report must be an original with no erasures, alterations, or use of correction fluid or tape. |
Co-borrower Reports - Separate credit repository inquiries are necessary when co-borrowers have maintained credit individually. |
Identify the Agency - The credit report must clearly identify the consumer reporting agency's name, address, and telephone number. |
Identify the Repository - The credit report must show the names of the national credit repositories used. |
Number of Repositories - AmMAC requires that a credit report include information from all three national repositories for each area where the borrower has resided in the last two years. |
The following are acceptable national credit repositories of credit information:
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Identify the Requestor - The credit report must identify who ordered the report and who was billed for the report, if different from the requestor. |
Employment Information - The credit report should include the employment history of the borrower. |
Credit Information - The credit report must provide information regarding the borrower's current credit history as well as any previous credit history within the last seven years. The information supplied should indicate:
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Public Records - The credit report must include a search of the public records in each location where the borrower has lived in the last two years. The search for public records should include any information reported within the last seven years such as:
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Foreign Credit Reports
Not Allowed.Top of Form
C. Non-Traditional Credit Reports
Not Allowed.
D. Credit Scores
Valid Borrower Credit Score
A borrower credit score is a number that indicates how likely a borrower is to repay a loan as agreed. Credit reporting agencies and/or credit repositories use statistical models to generate a credit score from a borrower's credit bureau file. Some products and program require both borrowers to have a valid score and meet the minimum credit score requirements.
The following are examples of information that is used to determine the credit score:
Payment history, including bankruptcy, judgments, collections, tax liens and wage attachments |
Amounts currently outstanding, including balances to limits |
Length of credit history |
New credit and re-established credit |
Types of credit in use |
Validity of Borrower Credit Score - Credit History (number of Accounts, Activity, Age)
Validity of the Borrower Credit Score - Accurate and Complete
Information used to obtain credit such as name, address, and social security number are accurate and complete.
Credit information is accurate, minor reporting inaccuracies will not invalidate the credit score. See significant inaccurate credit.
Selection of Borrower Credit Score
Selection of each borrower's credit score is as follows:
If there are three valid credit scores for a borrower, the middle score (numerical middle of the three scores) is used. |
If there are three valid scores for a borrower but two of the scores are the same, the duplicate score is used. |
If there are two valid scores for a borrower, the lower of the two scores is used. |
If there is one valid score for a borrower, then the borrower is ineligible for mortgage financing by AmMAC. |
Loan Score
If the lowest selected score is zero (0), and you have a co-borrower whose credit score is valid, the primary borrower is ineligible for financing by AmMAC. |
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If the Co-Borrower’s score is zero (0), they are not eligible to be on the loan but can be on title (and would need to sign necessary documents to perfect the security interest in the property). |
When there is only one borrower, the selected credit score for that borrower is also the Loan Score. |
Selection of Loan Score
The "middle/lower then lowest" methodology is used to determine the Loan Score. The "middle/lower then lowest" method can be summarized as follows:
Determine the appropriate credit score for each borrower on the loan
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Products and Programs requiring a minimum loan score
When no score is provided, the borrower(s) are not eligible for mortgage financing by AmMAC.
When there is only one borrower, the single score used to underwrite that borrower is the loan score. |
Minimum Loan Score
For the loan to be eligible, all qualifying borrower’s must meet the 720 Loan Score Requirement. If the Loan Score is below 720, the loan is not eligible for non-conforming financing.
720 Loan Score Requirements
The credit report should show:
- The Loan Score is >
- An acceptable credit history.
- The most recent 12-month (minimum) housing payment history (mortgage rating, rental rating or combination of the two) with no lates must be verified either by the credit bureau or by direct verification.
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