The new “Trended” credit reports are coming in September. This is going to be a pretty big shift in credit reporting and learning all about it now is pretty important. Not only for the sake of your job, but for the sake of your marketing as well. Tune in to today’s show and see our thoughts on it.
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Nice job guys (as usual), one addition. While FNMA has indicated they will use trended credit data as part of the underwriting process; this does NOT impact FICO scores. We’re receiving an inordinate number of inquires from mortgage and real estate professionals wrongly believing they can improve FICO scores through updating trended data (i.e. through credit rescoring or the consumer dispute process.)
At present, FICO uses only the current “snapshot” data regarding revolving account balances, payment amounts and the corresponding ratios; the inclusion of trended data does not impact FICO scores in any way.
Advising listing agents to price aggressively is great until the appraiser steps in and shoots down the deal.
List your Home and Ask MORE for it that the present market, the market will WHAT?
Nice idea, but not from the Appraisal Side. The Lenders and Fannie Mae have been kicking the appraiser for showing increasing markets and attempting to show positive time adjustments to credit sales in this increasing market.
Just for numbers, lets say over the past 6 months the value of sales is going up $2,000 a month. Last month the sales were $350,000 and you expect to sell next month. So you and your agent list the house for $354,000. Right on time you get an offer for $253,000 and your happy.
The appraiser comes out and one of two things happen
1 – The appraiser uses the sales from last month and your property comes in at $352,000
2 – The appraiser uses the sales from last month and your property comes in at $354,000
but, to get this value the appraiser shows a positive time adjustment from the contract date of the prior sales to the date of your contract. All sounds good, right
WRONG. The Lender, Fannie Mae or FHA then gets back to the appraiser and tells then they can not make a positive adjustment here. They make the appraiser remove the adjustment and once again it comes in at $352,0000
Now, some appraisers have stood up and said, this is my report and I will not change it. But they then find that no more work is coming to them through the same channels that this task did. So the next time it happens the appraiser gives in and leaves this adjustment out leaving the seller and buyer to work out a change to the contract.
AND, no one is happy.
The Appraiser looks like the bad guy as the Agents, Buyer and Seller don’t see that is it the Lender, Fannie Mae or FHA that is beating the appraiser up
Oooo Joy
Oh great – trended credit reports will result in even fewer buyers becoming approved. Just what the housing market needs.
At first blush, Trended credit doesn't seem so good for the Buyer. What about the Buyer who has recently worked on thier score and has just managed to get their FICO score above 640 (the general lender acceptance point in this area) and now since their "trend" over the past year wasn't that good, they get pulled back into the abyss. How long does a "trend" have to last to overcome years worth of late/no/partial payments? Making people overcome a "trend" may be more damaging to the person's ability to own a home in the long run. (Would that create a trend of fewer homes being sold?)
I understand that I am basing this on the area I am located in but I am not sure the answer is to raise the listing price despite the 78 day turn around time. The reason being is Pre-Dodd-Frank, if a home sold for a higher price, the appraiser could find reasons to bring the appraisal in a tad higher, thus allowing the market to rise. With the way things are now with the HVCC, good luck having an appraisal come in higher than the comps. The system in place promotes zero growth in the market.
I don’t see trended data having a major impact on most borrowers approvals, but it is a boon to the paper industry. what used to be a 10 page report is now 30+. Used to see 5-6 acts per page, and now we only see about 1.5 per page.
Trended credit for Fannie Mae only? We'll go elsewhere. Credit cards seduce people with a zero rate to transfer balances, and most charge more than 15% to even 700 scores.
Hello Frank, We met a decade ago when you were “Think Big and Work Small” I have followed you all of these years. I even paid you to help me understand how to make better videos. I use your videos to help train my agents. However, on todays show you are missing the mark with the statement that agents should be more aggresive with their pricing. You have it wrong, sellers WANT us to price the properties higher and when we do we end up having to reduce the contract price after the appraiser says, “sorry, but I can’t get the comps to justify your price”. My motto now is “list low and sell high” List the property just under the last sale and then receive multiple offers and end up finding the one who will pay $5,000 (or whatever) over the appraised price. Maybe you have been off the streets a little too long. You can’t always go by those damn statistics. have a nice day.
That is a really great question, and I'm waiting to hear the answer as well.
The trended credit window is 24 months. So your poor credit card performance – minimum payments, balance transfers- will bte you in the butt for 2 years,
I wanted to send this to all my loan officers, but can’t because you called the millennials “bas…” and I can’t send such language throughout our company. Makes me really sad that you don’t have respect for your listeners.