Regulating Consumer Credit Companies

Written By: Bonnie Wilt-Hild

I think anyone currently working in the mortgage lending industry will agree that at this particular time in history, we as lenders are more regulated than we have ever been. Further, under Dodd-Frank, more regulations are forth coming that will again determine how we disclose, what we disclose, when we disclose and in the not so far off future, how much a loan officer can actually charge for the origination service. So here we sit as an industry extremely over regulated to the extent that it is almost near impossible to approve mortgage applications and get them sold on the secondary market while the consumer credit industry runs amuck.

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Lately during credit reviews I have noticed that some borrowers who have otherwise exceptional credit, are demonstrating late payments with companies like Capital One, First Premier and lately even AMEX. Of course I ask for the explanation and supporting documentation and more often than not it is a disputed account in which the borrower has tried diligently to resolve but has been unable too because the credit card company just simply refuses to fulfill their obligation under the law. Most recently I had a borrower, an attorney no less, who had requested several times that AMEX no longer allow a direct withdraw from his online service provider because he cancelled the online service. Up until the date of the credit letter, the borrower demonstrated that not only has the online service provided not ceased charging his AMEX account for the service but AMEX continues to pay it. This borrower provided me with several letters he had sent on his law firms letter head and copies of the receipts demonstrating that he sent them certified mail and still he could not get either firm to heed his requests. Add insult to injury, when he stopped paying AMEX, stating that he has requested on several occasions that no longer allow the charged, they indicated multiple late payments on his credit report. Bottom line, AMEX does not have to do anything you request with regard to your account and can even pay people who request payment without your consent, and you still have to pay them.

Very recently my own daughter had her credit pulled because she was contemplating purchasing a home of her own. When she received the report, she noticed a couple of derogatory items on there that she had no knowledge of. One was an authorized user account from First Premier which was being demonstrated as past due with a balance. Since she had no idea what this was or what to do, I called the company explained the account was not hers and that they needed to investigate and remove the account from her report as she was trying to purchase a home. The response I got, “Well we don’t really do that stuff here, and maybe she should write a letter to the credit repository and see if they can help her.” My response was “Sorry I don’t think so. Your firm is reporting derogatory information erroneously on my daughter’s credit report that is impacting her credit score which could result in a loan rejection. If that happens I promise you, she will file suit against your company for the amount of credit she was denied as a result of your false reporting.” Finally the customer service representative (if you want to call her that) said, “Well I looked it up and are system isn’t showing anything in her name, “ and I said, “yes but her credit report clearly states that your company is reporting a delinquent balance owed by her which is currently past due…..” this conversation went on and on with the customer service representative basically telling me that if she couldn’t see it then it wasn’t there (that’s right sweetheart, eat another bowl of lead based paint). Finally, I managed to get a fax number form her for her dispute department and have yet heard as to the outcome.

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Bottom line is this, I think the federal government should now turn their attention from the extremely over regulated mortgage industry and start focusing on credit card companies and insurance companies and all of those other service providers who have decided someone owes them money (even when they don’t), files false reports with the credit bureaus and when the borrowers contact them and them they are violating federal law, they respond saying, “So”. Believe it or not if just one half of the misinformation on consumer’s credit reports were corrected we could approve 50 more loans each month. Have a great week all.


About The Author

Bonnie Wilt-Hild - As an NAMP® staff writer, Bonnie currently serves as a senior instructor for FHA Online University (www.FHA-Classes.org) as well maintains a full-time mortgage underwriting position as the Senior FHA DE Underwriter for a major lending institution. With over 25+ years of senior-level FHA/VA Government underwriting experience, Bonnie is considered the "Queen of FHA Loans". If you're interested in becoming a writer for NAMP®, please email us at: contact@mortgageprocessor.org.


Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.