Rapid Rescore Costs

By
Mortgage and Lending with NMLS# 335055 335055

Rapid Rescore Costs

What is Rapid Rescore?

A Rapid Rescore of a credit report is when a client provides documentation about erroneous information on their credit report…. And their Loan Officer submits these items to the credit bureaus to be updated. The loan officer doesn’t go directly like a consumer would. The loan officer will go through a 3rd party company that they use to pull credit. Examples are: Credco, Factual Data, ect…..
The Rapid Rescore process takes 3 – 5 business days. It has been my experience that these rescores are usually done in 2 – 3 days. The 3rd party companies I have used in the past have all been pretty quick about turn times.

How much does Rapid Rescore cost?

Rapid Rescore costs the loan officer(or, rather the lender who is being billed for credit pulls) about $35 per trade line per bureau.
So, if you need to correct 2 items on all 3 bureaus(Equifax, Experien, Transunion) then that is $35 X 6 = $210

Now, here is the good part!!!!

Of these 3rd party companies that I have used in the past…… Every one that I have ever discussed Rapid Rescore with has informed me that it is ILLEGAL to pass along the cost of the Rescore to the client. That’s right….. I said ILLEGAL!!!
Technically it is a violation of RESPA (Real Estate Settlement Procedures Act).
HUD defines this service as something that generates an ‘Unearned Fee’. Unearned Fees are not allowed per RESPA.

So…. Who pays for it? The lender does. It is simply a cost of doing business.

Will you be asked to pay for this from an unscrupulous or ignorant lender? Sure you will. But ignorance is no excuse for breaking the law. And this law has teeth. As an Act of Congress, lenders can be charged: Any person or persons who violate the provisions of this section shall be fined not more than $10,000 or imprisoned for not more than one year, or both.

I don’t think it is worth it to cheat the system. And I wouldn’t work with a lender who cheats either.
Do yourself a favor and read the law…. Know your rights. And if you have any questions about this article…. Contact The DallasLoanGuy, Tom Burris.

 

Tom Burris
DallasLoanGuy.com
NMLS# 335055
Dallas, TX

214-763-4629 cell/text/nights/weekends

http://www.dallasloanguy.com/
The ORIGINAL ‘Loan Guy’ from Texas…. Often imitated, never duplicated!!!

I write about Texas Home Loans , live in the Dallas, TX area and lend across the entire Great State of Texas!!

Your Texas FHA Expert and Dallas Mortgage Expert.

 

http://dallasloanguy.com/rapid-rescore-costs/

 

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. James Lyon 01/21/2012 11:19 AM
Topic:
Lending / Financial
Groups:
Collin County, TX Real Estate Professionals
Home & Credit Savvy
Mortgages
Texas Real Estate
Tags:
rapid rescore costs

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Rainmaker
326,280
David Krichmar
www.DaveYourMortgageGuy.com, FHA, VA, USDA, HomePath, Jumbo - Sugar Land, TX
DaveYourMortgageguy.com

Tom, why are you getting advice from the credit report companies?  And not the state on this matter.  The cost of the rapid rescore fee due is shown on the credit report and even an invoice you can send them.  I'm sorry for having to do this on your featured post.  but this is dead wrong. 

Jan 19, 2012 11:53 AM #11
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Dave, Once the consumer dispute is resolved the client can get a loan.

Correct.... I wouldn't spend $1000 like that. I have spent $200 - $250 many times.

I sent en email to HUD. I will report back what I hear.

 

 

Jan 19, 2012 11:59 AM #12
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Correct Vanessa

Not everyone will agree that it is 'earned'

THAT is the issue.

 

Jan 19, 2012 12:00 PM #13
Anonymous
Anonymous
vanessa guzman

I help run a $25MM/mo region (small potatoes I know) & must know compliance do's & dont's in order to sell our loans to both investors & agencies.

An LO of ours forwarded me your post & to help put out a small fire caused by you, I'm responding with accurate statements.

Good luck out there-

Jan 19, 2012 12:00 PM #14
Rainer
177,469
Rosalie Evans
Meritus Group Real Estate - Sioux Falls, SD
The Evans Group, Sioux Falls, SD Homes For Sale

This is interesting information but I have a question? If the 3rd party company determines that the borrower still owes the money are they still charged for the service?? I didn't even know this service was available! Thanks for the information. 

Jan 19, 2012 12:03 PM #15
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Here is that the Fair Credi Reporting Act says abou it:

611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i]
(a) Reinvestigations of Disputed Information
(1) Reinvestigation Required
(A) In general. Subject to subsection (f), if the completeness or accuracy of any
item of information contained in a consumer's file at a consumer reporting
agency is disputed by the consumer and the consumer notifies the agency
directly, or indirectly through a reseller, of such dispute, the agency shall,
free of charge, conduct a reasonable reinvestigation to determine whether
the disputed information is inaccurate and record the current status of the
disputed information, or delete the item from the file in accordance with
paragraph (5), before the end of the 30-day period beginning on the date on
which the agency receives the notice of the dispute from the consumer or
reseller.t CAN be interpreted

 

I agree. I can see how people will interpret things differently.

Especially with a Govt document.

 

Jan 19, 2012 12:04 PM #16
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Rosalie,

This isn't the same thing as the frivilous disputes sent in by some consumers.
This service requires solid documentation.
Example: Credit card balance reported as $1000 when the actual balance is $500. With a statement, that can be updated.
A paid off collection: A letter from the creditor or th collection agency affirming that the account is indeed paid would be required.
This is NOT a dispute process..... Rather an 'updateing' process.

 

Jan 19, 2012 12:18 PM #17
Rainmaker
591,130
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Tom,

Absolutly!

There doesn't have to be any disputed credit or corrections involved, just more information. It's just this type of thing that builds a wall between Agent's and LO's. Pre-qual's and pre-approvals can only be based on it information available at the time, if a credit report detirates before funding no "pre" is of any value!

Experinced Agents have experinced the same thing when the buyers that had to have a 'rancher" buy a two-story from someone else, consumers change! It happens. 

Bill

Jan 19, 2012 12:28 PM #18
Rainmaker
1,384,039
Donna Harris
Donna Homes, PLR - Austin, TX
Realtor, CDPE & ASP - Hill Country Lakeway Austin

Great explanation of the rapid rescrore. However, if you helped the consumer with what to do to get things removed from his credit that are wrong, how is that an unearned fee? It's work and all work is earned...

Jan 19, 2012 12:30 PM #19
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Good question Donna.

I have been told that RESPA considers it an 'Unearned Fee' because it is something the borrower can do themselves. I didn't make that interpretation. I just follow the rules. I have spent thou$ands of dollars on rapid rescores because of what I was told.

I have been doing rapid rescores since forever. Always been told this by our credit report resellers.


I know many loan officers charge for the service.

Jan 19, 2012 12:36 PM #20
Rainer
173,694
Dave Sullivan
www.TheCreditGuy.TV - Birmingham, MI
The Real Story on Your Credit Score - TheCreditGuy

Tom,

Nice Job on this, You can check my background on linked-in, I have worked at Kroll Factual Data for the last 12 years and have been selling credit reports in the Mortgage business for the last twenty plus years and have authored a book on credit scoring. (check it out at www.thecreditguy.tv ) 

You are correct on everything you have talked about to this point. You can not charge the borrower.  You are paying for the expidited service (because the borrower can fix it on his own)

Thank you and keep up the good work...!!

Dave Sullivan 

Jan 19, 2012 01:47 PM #21
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Dave,

From what I have read in the FCRA and RESPA along with info from the bureas.... It sounds like the bureaus cannot harge the reseller for this. And that the reseller is the one originating the fee. Therefore, there was no charge to get this done.... except for an expediting by the reseller to me...... which I gladly pay for.

I see a lot of loan officers say out loud that they charge a fee to the borrower. I have seen pricing spelled out on lender websites. Do these people not realize that thy can go to jail?

Why would a lender argue? Why wouldn't they err on the side of caution?

 

I might be wrong about the RESPA violation. It may actually ONLY violate just the FCRA. I think it violates both.... not 100% sure.

 

 

Jan 19, 2012 02:52 PM #22
Ambassador
536,205
JO SOSS
HOMEFRONT Realty - Bremerton, WA
Kitsap County WA Real Estate - HOMEFRONT Realty

I am so tired of cheaters or those that try and get around a system.  UGH! Thanks for the information!

Jan 19, 2012 05:49 PM #23
Rainmaker
243,552
Kim & Kristine Halverson
www.KimAndKristine.com, Santa Monica Real Estate :) - Santa Monica, CA
Realtors, Santa Monica Real Estate, CA

Well said!  There is a way to make an honest dollar.  Sleeping at night is good too.  Kristine :)

Jan 19, 2012 05:58 PM #24
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Where is the 'Like' button?

LOL...

 

Thanks!!

 

Jan 19, 2012 07:03 PM #25
Rainmaker
1,929,970
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thanks for the information about Rapid Rescore. I will check it out with some local lenders.

Jan 20, 2012 07:03 AM #26
Rainmaker
565,501
Kathy Sheehan
Movement Mortgage 770-634-4021 - Atlanta, GA
Branch Manager

It was my understanding too that these charges could not be passed on to the buyer.  I am going to verify with compliance.  

I love the rescore as a tool to help borrowers get the best interest rate.

Jan 21, 2012 11:37 AM #27
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

Kathy,

I got a non-answer from HUD. They recommended that I email CFPB...  ugh!!

Please report back.

 

Jan 22, 2012 10:57 AM #28
Rainmaker
541,873
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Tom, I never knew how that worked! Thanks for clearing it up. I can't believe that you aren't allowed to say how much it costs. Amazing.

Mar 25, 2012 02:05 PM #29
Rainmaker
327,819
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

We can say how much it costs.... We just cannot pass along the charge to the borrower.

 

Mar 26, 2012 12:43 PM #30
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Rainmaker
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Tom Burris

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