After the Equifax security breach that impacted millions of US consumers, many have elected to place a credit freeze on one or all of their credit reports as a safeguard. While putting a freeze on your report helps protect against fraud, it can present challenges if the consumer needs to obtain legitimate financing.
Fannie Mae has announced it will update Desktop Underwriter® (DU®) Version 10.0 & Version 10.1 to underwrite loan casefiles when a borrower has a frozen credit report at only one of the three credit repositories.
When credit is frozen at one of the three repositories, the loan casefile will be underwritten using the credit data received from the other repositories, and DU® will issue the following Potential Red Flag message.
Based on the credit data received, a borrower has frozen their account with one of the credit repositories. No data from that repository was used in underwriting the loan casefile. The lender remains responsible for preventing fraud, which includes, but is not limited to, ensuring the borrower’s identity has been verified. In addition, the lender must continue to investigate any liabilities or derogatory credit that is disclosed by the borrower but not reflected on the credit report.
When credit is frozen at one of the three repositories, and no credit scores are received from the other two repositories, DU will evaluate the loan casefile using the guidelines specific to borrowers without traditional credit and issue a Potential Red Flag message. This new message will inform the lender that the borrower has frozen their account with one of the credit repositories, there is no data available from the other two repositories, and that the lender remains responsible for ensuring the borrower’s identity has been verified and any credit disclosed by the borrower is investigated.
If the credit report is frozen from two or more of the credit repositories, Fannie Mae will not underwrite the casefile through DU®.
This change will go into effect November 18, 2017.
You can lift the security freeze by phone, using the PIN that was given to you when you froze your report. The credit bureaus must lift your freeze within three days. The fee for lifting the freeze temporarily is $10 for a date-range lift and $12 for a lift for a specific creditor.
TransUnion or 800.916.8800 option 4
In accordance with preventing fraud on the file, a social security verification can be requested to aid in ensuring the borrower’s identity. Please contact your local Data Facts representative for this and other mortgage lending services.
Please review the below helpful FAQs on security freezes:
1. Can I open new credit accounts if my files are frozen?
Yes. If you want to open a new credit account or get a new loan, you can lift the security freeze on your credit file. You can lift it for a period of time. Or you can lift it for a specific creditor. After you send your letter asking for the security freeze, each of the credit bureaus will send you a Personal Identification Number (PIN). You will also get instructions on how to lift the freeze. You can lift the security freeze by phone, using your PIN. The credit bureaus must lift your freeze within three days. The fee for lifting the freeze temporarily is $10 for a date-range lift and $12 for a lift for a specific creditor.
2. How long does it take for a security freeze to be in effect?
Credit bureaus must place the security freeze no later than five business days after receiving your written request.
3. How long does it take for a security freeze to be lifted?
Credit bureaus must lift a security freeze no later than three business days after receiving your request.
4. What will a creditor who requests my file see if it is frozen?
A creditor will see a message or a code indicating that the file is frozen.
5. Can a creditor get my credit score if my file is frozen?
No. A creditor who requests your file from one of the three credit bureaus will only get a message or a code indicating that the file is frozen.
6. Can I order my own credit report if my file is frozen?
7. Can anyone see my credit file if it is frozen?
When you have a security freeze on your credit file, certain entities still have access to it. Your report can still be released to your existing creditors or to collection agencies acting on their behalf. They can use it to review or collect on your account. Other creditors may also use your information to make offers of credit-(unless you opt out of receiving such offers). See below for how to opt out of pre-approved credit offers. Government agencies may have access to your files for collecting child support payments or taxes. Government agencies may also have access in response to a court or administrative order, a subpoena, or a search warrant.
8. Do I have to freeze my file with all three credit bureaus?
Yes. Different credit issuers may use different credit bureaus. If you want to stop your credit file from being viewed, you need to freeze it with Equifax, Experian and TransUnion.
9. Will a freeze lower my credit score? No.
10. Can an employer do a background check on me if I have a freeze on my credit file?
No. You would have to lift the security freeze to allow a background check or to apply for insurance, just as you would to apply for credit. The process for lifting the freeze is described above.
11. Does freezing my file mean that I won’t receive pre-approved credit offers?
No. You can stop the pre-approved credit offers by calling 888-5OPTOUT (888-567- 8688). Or you can do this online at www.optoutprescreen.com. This will stop most of the offers, from credit bureaus. It’s good for five years or you can make it permanent.
12. Does my spouse’s file have to be frozen, too?
Yes. Both spouses have to freeze their separate credit files, via separate letters requesting the security freeze, in order to get the benefit. That means the total cost for freezing is $10 x 3 credit bureaus x 2 people = $60.