| a. | Required Credit Reports. Lenders must request a Three Repository Merged Credit Report (TRMCR) on each Section 184 homebuyer. Although HUD does not generally require it, lenders may request a Residential Mortgage Credit Report (RMCR) as well. The lender must also separately develop credit information for any open debt listed on the loan application but not referenced on the credit report. |
While the TRMCR should prove sufficient for processing most loan applications, the following circumstances require ordering an RMCR:
| 1. | The borrower disputes accounts on the TRMCR. |
| 2. | The borrower claims that collections, judgments, or liens reflected as open on the TRMCR have been paid but cannot provide separate supporting documentation. |
| 3. | The borrower claims that certain debts shown on the TRMCR have different balances and/or payments but cannot provide current statements (less than 30 days old). |
| 4. | The lender’s underwriter determines that it would be prudent to utilize a RMCR in lieu of a TRMCR to properly underwrite the loan. |
| b. | Charges for Credit Reports. In all cases, the borrower may be charged only the amount billed by the credit reporting agency. |
| 1. | A borrower may not be charged for both a TRMCR and a RMCR on the same loan except when delays on the part of the borrower require the TRMCR to be updated and a RMCR is ordered for one of the reasons described above. |
| 2. | Most credit reporting agencies will not charge for the TRMCR if the RMCR is ordered within 15 days of the TRMCR. The lender must make every effort to determine the need for the RMCR within this time frame to avoid the additional charge. |
| c. | Standards for Credit Report Submission to HUD. Credit reports submitted to HUD must: |
| 1. | Be the original provided by the credit reporting agency or received electronically and printed by the lender’s printer. If the credit report submitted is not the original, the lender (by submission) certifies this to be an unaltered credit report. |
| 2. | Contain all credit that is available in the repositories, be accurate and complete, and provide an account of the credit, residence history, and public record information of each borrower responsible for the mortgage debt. The report must include all credit and legal information not considered obsolete under the Fair Credit Reform Act. This includes bankruptcies, judgments, lawsuits, foreclosures and tax liens that have occurred within the last seven years. |
| 3. | Contain a 24-month employment and residency history if not verified otherwise. |
| 4. | Identify each borrower’s name, social security number, date accounts were opened, credit limit, required payments, unpaid balance and payment history of each account. |
| 5. | Payment history must appear in the "number of times past due" format and be otherwise easy to read and understandable. |
| 6. | Must have no whiteouts, erasures, or alterations. |
| 7. | Indicate the name and address of the credit reporting agency, and each account listed must show the primary repository from which the particular information was obtained. |
| 8. | Show the name of the party ordering the report. |
