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Important Information about Credit Reporting of Tax Liens and Civil Judgments

June 27, 2017

Background

The nation’s three leading credit reporting agencies (CRAs), Experian, Equifax and TransUnion, reached a settlement agreement with the New York Attorney General and established the National Consumer Assistance Plan (Plan). The Plan requires CRAs to improve the accuracy of credit reporting and monitoring, and the dispute resolution process for consumers. Specifically, the Plan includes changes to the reporting standards for medical collections, certain debts that did not arise from a contract or agreement-to-pay and public record data (including tax liens and judgments).

What You Should Know

We don’t anticipate any changes to our requirements in response to the Plan. We’re confident in Loan Product Advisor® and its ability to help you assess the borrower’s credit reputation, regardless of public record data that may be suppressed or removed from the credit report based on these changes.

What This Means for You

We encourage you to continue to use or begin using Loan Product Advisor for greater certainty that your loans meet our eligibility requirements.

For Accept Mortgages, Loan Product Advisor will help you assess the borrower's credit reputation and determine that the credit reputation is acceptable. Therefore, you’re not required to perform an additional assessment or obtain additional documentation to validate the borrower’s credit reputation. Mortgages where not all borrowers have a usable credit score or where no borrower has a credit score must meet other credit requirements.

For manually underwritten loans, you’ll still be required to document the borrower's credit reputation and the determination that the borrower's reputation is acceptable. Your assessment of the borrower's credit reputation must be based on the entire credit history documented in the mortgage file.

Please consult our Single-Family Seller/Servicer Guide (Guide) for complete selling requirements.

For more information, contact your Freddie Mac representative.