Mortgage lenders no longer have to pull a second credit report before closing on a loan, according to Fannie Mae. The practice of using two credit reports began in June 2010 with the start of Fannie Mae’s “loan quality initiative.” The initiative was intended to ensure that Fannie Mae did not end up buying loans it hadn’t agreed to.
The initiative spurred lenders to prevent sloppy underwriting and defaults on loans. To do this, lenders began checking consumers’ credit reports twice: once when the consumer applied for the loan, and a second just before the loan closed. Lenders used the second credit report to check whether the consumer had taken on extra debt since applying for the loan.
Unfortunately, this system began to backfire because consumers who seek mortgages often use their credit cards to pay for big-ticket items like moving costs or new furniture. The appearance of these new debts on the second credit report, however, were encouraging lenders to decline to provide mortgages to the borrowers. The loan quality initiative was intended to help homeowners obtain mortgages by balancing the risks that lenders and Fannie Mae had to take. Instead, the process of pulling two credit reports was resulting in too many consumers being denied loans.
Fannie Mae also made clear that lenders still have to disclose changes in a borrower’s debt. To do this, some lenders may pull a second credit report anyway. As always, consumers have the option to review their credit report for free each year. Consumers can get their credit reports by visiting Also, if the credit report contains incorrect or false credit information, the Fair Credit Reporting Act provides steps that consumers can take to correct credit reports.


If you have been victimized by a debt collector or have items on your credit report that are incorrect, call or email Attorney Gary Nitzkin for a free consultation at (888) 293-2882. For more information about your credit rights as a consumer, visit our blog at Visit our website at