QUESTION
I have a kind of nuanced question. A borrower asked our loan officer to
explain the borrower’s credit score. Is the loan officer required to explain the
credit score?
Also, we are a wholesale lender and one of our mortgage brokers is
asking us about the credit score disclosure obligation. They want to know who
issues it. If there is a mortgage broker and a mortgage lender on a deal, should
each of them provide the credit score disclosure to the borrower?
ANSWER
With respect to an obligation to explain the credit score information
to a consumer, there is no such requirement. The obligation of a person who
makes or arranges a loan and is subject to the credit score disclosure requirements
is limited to solely providing a copy of the credit score information that was received
from the consumer reporting agency, and the person does not have to explain the
information or disclose any information other than the credit score and the key
factors pertaining to the credit score. [15 USC §§ 1681g(g)(1)(E), (F)]
Regarding the issuance of the credit disclosure
in a wholesale transaction, a person subject to the credit score disclosure
requirements is not obligated to provide a disclosure when another person has
made the required disclosure to the consumer for the loan transaction. Furthermore,
a person does not have to provide more than one disclosure per loan
transaction. [15 USC §§
1681g(g)(1)(E)] However, it is advisable that mortgage brokers and mortgage
lenders coordinate who will provide the disclosure to a consumer.
Jonathan Foxx
Managing Director
Lenders Compliance Group
