In an article in the Tuesday, October 6, edition of the San Francisco Chronicle entitled “Layer of credit checks surprises home buyers,” a woman named Kimberly Hayes explains that when she and her husband decided to bid on a bank-owned property, they were shocked to discover that the only way the bank would allow them to do it is if they could do their own credit check beforehand.
“This unnecessary credit pulling can potentially lower my credit score and widens the exposure of my sensitive financial information,” the article quotes her as saying. “I’m concerned about another set of eyes looking at my private information in a time of so much identity theft.”
And, apparently, they are not the first potential buyers to find themselves in this situation. Though not all lenders have this policy when it comes to their REOs, (Wells Fargo, JPMorgan Chase and OneWest Bank are all quoted as saying they do not require their own credit checks of potential bidders) it appears that some of the banks who do also insist that the bidder apply for a mortgage with them.
“…It was strongly implied that if we did not [apply with the lender who owned the property], we shouldn’t even bother making an offer,” Hayes explains in the article.
But, it’s not just the lenders who are asking for credit checks. The story goes on to say that it’s more often the listing agents of the REOs who are doing so. And, in the process, they are doing little to endear themselves to potential buyers.
However, some agents are going out of their way to do the best they can to help their clients avoid these extra credit checks–and the harm to their credit report that can come with them.
The article explains that an agent contacted IndyMac Bank on her client’s behalf in February, saving the client what could have been an enormous pain in the behind (Apparently, before it failed, IndyMac was requiring potential bidders to submit an entire loan application–including tax records, pay stubs, bank statements, application form, and credit check.) But, the agent was able to get IndyMac’s permission to submit all the paperwork they’d already given to the bank who had pre-qualified the client, including copies of the credit reports the bank had obtained.
The article concludes with a quote from the client, Carol Jones, which provides us with the moral of our story: “My lesson from all of this is that a good Realtor…can spare you any problems or inconvenience in accommodating this…practice by the banks.”
In these tough times, I think this is a moral that all of us should keep in mind–don’t you?