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First American CREDCO Supports Updated FHA Credit Reporting Requirements
By James Comtois
ST. PETERSBURG, FL-First American CREDCO's Instant Merge and Anthem Suite products exceed certain guidelines for the updated Federal Housing Administration credit reporting requirements for FHA mortgage insurance risk-based premiums calculations, the company said. Specifically, the products meet or exceed requirements for credit reporting, scoring and non-traditional credit compilation and verification.
Available since 2004, the Anthem Report is used by mortgage lenders to obtain credit for borrowers with little or no credit history. Anthem is fully compliant with the non-traditional credit compilation and verification methodologies of Fannie Mae, Freddie Mac and FHA.
"Instant Merge and Anthem together help provide traditional credit bureau reporting and scoring, non-traditional credit reporting specific to the FHA's requirements and a borrower disputes process as outlined by the FHA," said Mark F. Catone, senior vice president of First American CREDCO, a provider of credit reports to the mortgage and consumer finance industries and part of First Advantage Corp here.
The FHA recently outlined new risk-based premiums on one- to four-unit single-family mortgages, explaining that the premium levels are charged by risk, using the decision credit score value and long-term value to determine the premium. The decision credit score is the median score when three scores are available, or the lesser of two scores when only two are available and "one" when only one score is available.
The FHA further explained that the borrower may dispute the accuracy of the credit report and score, allowing the borrower to either delay the transaction and repair their credit or pay the premiums based on the existing score.
First American CREDCO's consumer dispute resolution services are included free of charge for lender customers who pull credit reports through the company. The service allows borrowers to leverage First American CREDCO to help them navigate the complex process of disputing credit issues with one, two or all three national credit bureaus.
Additionally, when no decision score is available for underwriting purposes, borrowers with non-traditional or insufficient credit must qualify based on the underwriting guidance described in the FHA's June 11, 2008 Mortgagee Letter 2008-11.
The letter clarifies the compilation and verification standards for non-traditional credit, including FHA Group 1 payment types (rental housing, gas, electricity, water, telephone and cable) and Group 2 payment types (insurance, daycare, Internet, cell phone and retail).
First American CREDCO's Anthem non-traditional credit report meets or exceeds the FHA's non-traditional credit verification and evaluation methodology. First American CREDCO also offers a web services interface, where Anthem allows customers to completely automate all aspects of the FHA credit reporting requirements, including those in cases of thin- or no-file consumers.
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