January 9, 2025 • 24 mins
In this episode of Loan Officer Training, we dive deep into the powerful tools of credit simulations and rapid rescores—game-changers for loan officers looking to help clients improve their credit scores quickly and efficiently. Learn how to analyze credit reports, leverage simulation tools to create actionable plans, and navigate the rapid rescore process to achieve better loan outcomes. Whether you’re working with first-time buyers or clients with challenging credit, these strategies will elevate your expertise and empower you to close more deals. Tune in and take your credit mastery to the next level! 🎙️💼✨
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The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!
Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Restream recording Jan 09, 2 (00:00):
So what exactly is a credit
(00:03):
simulator, right?
A credit simulator is a toolthat allows the NLO or the
borrower to simulate differentcredit scenarios.
and generates a simulated creditscore.
This is a great tool to use, uh,just so that you all know at the
(00:24):
mortgage calculator includedwith whatever credit report we
pull is a free score navigatorcredit simulation.
So, uh, what exactly is scorenavigator?
And actually let me back up asecond and let me, uh, explain
the importance of creditsimulations.
(00:46):
Not only To add value, you know,to for you to add value to the
transaction, but also you neverknow when something's going to
happen and you may need a coupleof extra points in the credit
score.
Maybe you do qualify for abetter program.
Or just to qualify at all, youknow, um, the file gets
(01:08):
underwritten.
Um, the, um, income drops forexample, and now you need a
higher credit score to maintainyour approval, right?
Because now the DTI is higher,right?
So higher DTI, if you're doingautomated underwriting.
(01:28):
It's going to look at the creditscore and either approve you or
not for that higher LTV loan.
For example, it might get that95 percent LTV.
Uh, and, uh, you have, uh, 48%DTI, you're gonna need a good
credit score, right?
You're gonna need 700 or above.
(01:50):
So you know, you may havethought the DTI was good, right?
But now all of a sudden they hityou with, hey, they cut your
income overtimes now what youthought it was.
And now all of a sudden yourborrower is not qualifying for
that, um, high DTI loan becausetheir credit score is below a
(02:11):
700.
So, it's always a good idea toexplore credit simulations in
the beginning of the processwith the borrower once you have
the credit, uh, report.
Identify opportunities and seeif it may, uh, be something that
the borrower wants toparticipate in.
(02:32):
And then you, as the mortgageloan originator, obviously have
to give the important points ofhaving the highest credit score
possible.
Okay.
It's not the first time thatI've seen a deal fall through
exactly for the reason that Istated and no credit simulation
was ever attempted in thebeginning and then all of a
(02:55):
sudden they want to do a creditsimulation and a rapid rescore
with 10 days left to closebecause of the income.
That got dropped, right?
So, um, you know, don't wait forthe last minute.
Uh, I would keep it as a bestpractice, uh, to do it.
You know, it's included in, inwhat we in the credit reports.
(03:15):
Like I stated, you just have toknow how to use the tool.
So score navigator is the creditsimulation tool.
That we have a score navigatorhas a couple of different, um,
tools within it, right?
You have the money simulatorwhere in the money simulator,
(03:38):
uh, you can enter how much moneythe borrower has to pay down on
debt.
And then the, uh, uh, systemwill, um, tell you what needs to
be done to with that amount ofmoney.
What's the best.
That can be done, right?
(03:58):
So it's, it's, it's analgorithm.
So for example, um, bar has 3,000 to pay down debt.
Okay.
You put 3, 000 they haveavailable.
The program gets to work and it,and it basically lets, you know,
okay.
With the 3, 000.
This is the best case scenariofor the borrower.
So that that's one of the creditsimulators that we have within
(04:22):
score navigator.
The other one, uh, another one,not the other one, another one
is target score simulator.
Now, if you all remember, uh, weused to have a couple other
systems before one was wayfinderand, and the other one was what
if so the target scoresimulator.
(04:45):
Is the, uh, wayfinder versionwhere it, you, you, you
basically state what is thescore that, that you're
targeting.
And the system calculates, uh,what needs to be done to reach
that score if it's even possibleto reach that score.
(05:06):
So it basically provides themost efficient path to reach the
desired target score goal byutilizing the fewest number of
accounts.
Uh, the results that you'regoing to receive.
Now, this is pretty cool here.
Now, the results you're going toreceive will include the
estimated credit score increase.
(05:27):
the cost to the borrower forfollowing the recommendations,
the maximum achievable score,and this is the cool one, and
the best estimated day of themonth to pull the credit.
Believe it or not, it doesmatter.
Obviously, the system is goingto calculate, is going to look
(05:48):
when the accounts.
Cycle, right?
So that the credit is pulled,uh, when the payments are made.
Now, another tool is the smartscore simulator, which is a
manual simulator.
This is similar to the old, uh,what if credit simulator that we
(06:10):
used to have?
Uh, this is one of my favoritesbecause with this one.
You can actually play aroundwith the balances, play around
with the accounts to see whathappens, right?
Uh, this is the true, uh, realinteresting one, because for
example.
You can change the balances tosee what happens to the credit
(06:33):
score and different accounts,because you all know when the
balances are all loaded up tothe close to the limit, it's
going to affect the creditscore, right?
Uh, so you definitely want tobring down those balances.
Now, one thing about balances Iam going to make note of is that
the only balances that are goingto affect your credit score.
(06:56):
Are going to be revolvingcredit, credit cards, not
installment balances, right?
Installment loans.
Actually, if an installment loanis paid off and the account is
closed, it can actually reduceyour credit score.
So never tell your borrowers to,uh, why don't you finish paying
(07:17):
off that car?
Why don't you finish paying offthat personal loan?
That's an installment loan.
Because you may actuallydecrease their credit score
because you're going to increasethe credit utilization, right?
Credit utilization is what we'retalking about here, the
balances.
The, the lower the creditutilization, the higher the
(07:39):
credit score.
If you eliminated installmentaccount of 5, 000, you just
eliminated 5, 000 of availablelimit, and the borrower still
has the same overall balances ontheir other accounts.
What's going to happen is theircredit score is going to drop
because the utilization hasincreased.
(08:01):
So in the Smart Score Simulator,we can change balances.
We can delete an authorizeduser.
On good accounts to to see whathappens or bad accounts.
I mean, a lot of times you yousee an authorized user account
that the bar is on and it'smaxed out, you know, you know,
(08:21):
eliminate that account or yousee an authorized user account,
uh, that has a derogatory on it,you eliminate that account, but
you can again.
Check on it in the system todelete it and see what would
happen to the credit score ifyou were to delete that account.
Now, another option, um, is toremove disputes, right, and see
(08:48):
what happens, because sometimes,you know, you, you, you're doing
a DU and it says remove thisdispute to try to get the, the
automated approval, but then ifyou go and you click to remove
the dispute, 50 points.
So at that point, you may notwant to remove the dispute, you.
(09:09):
And you may actually want to gowith the manual underwrite route
and keep the credit score whereit is, right?
You don't want to remove, again,removing a dispute is a double
edged sword.
Uh, now you can also click toremove a late payment to see
what happens to the credit scorein case the borrower can somehow
(09:32):
figure out some kind ofdocumentation to get, um, to get
that, uh, late payment removedvia a rapid rescore.
Or you can see what would happento the credit score if the, um,
late payment was removed.
Uh, Smart Score Simulator alsolets you see the best day to
(09:54):
pull credit, and it also letsyou see the best estimated date
to pull credit, right?
To, they sound the same, butthey're different, uh,
components there.
Now the other, um, tool, uh,which I think is sort of blocked
out there in the bottom there isthe mortgage action plan MAP.
(10:18):
The mortgage action planprovides suggestions on ways to
increase the score in the longterm.
So in other words, a mortgageaction plan is not something you
borrower for the long term.
To do a rapid rescore toincrease their credit score and
three to five days, which iswhat the rapid rescore does.
(10:39):
The mortgage action plan is justanother way.
For you to add value to thetransaction, uh, by providing
the borrower, uh, some goals forthe long term so they can
increase their credit score.
If, for example, they're notplanning on doing anything right
now, maybe they're going to doit in six months, uh, you can
(10:59):
give them that type of aconsultation.
Now, all of this that we'redoing here with the credit
simulator, again, right, addingvalue to the transaction, But
we're also preparing theborrower for a rapid rescore
right now.
What exactly is a rapid rescore?
(11:19):
A rapid rescore is a processwhereby the, the new balances on
the accounts are pushed to thecredit bureau.
Um, and updated within 3 to 5days.
Probably if you do a rush, it's3 days.
If you don't do it, or maybethat's a rush, could be 1 to 3
(11:41):
days.
The regular process 3 to 5 days.
So, obviously, if you're in aloan, uh, loan application comes
in credits, credit report comesin and you identify
opportunities, uh, for theborrower to be able to qualify.
So get, bring that, uh, get thatfive 80 up to a six 40, for
(12:03):
example, or get that five 50 upto a five 80 so you can.
Hopefully get and approveeligible for an FHA loan with 3.
5 percent down, which requires aminimum of a 580.
That's something you would do upfront.
Or if you get the unforeseencircumstance, like I mentioned,
your income drops, DTIincreases, now you don't qualify
and you got to increase yourcredit score.
(12:25):
The Rapid Rescore allows you toget the credit score updated,
uh, within a short period oftime so that hopefully the
borrower can close.
Now, you got to understandthere's three credit bureaus,
right?
TransUnion, Equifax, andExperian.
They have different algorithms,so whatever change is done on
(12:50):
one bureau isn't necessarilygoing to have the same result.
And it's really important toknow that you only want to
rescore the bureaus that need tobe increased.
You don't have to do all three.
Right?
So what do I mean by that?
Okay, let's say, for example.
You need at least a six 60credit score for A DSE for a,
(13:13):
let's say, a non QM loan to geta 80% LTV.
But, uh, your borrower has a six40, a 6 55, and a 6 55 and a six
40 Equifax, 6 56 55 Experian,and 6 55 TransUnion.
If you need a middle score of atleast a 660, you're going to
(13:34):
have to do the Equifax and theTransUnion.
You're going to have to rescoreboth bureaus that are 655, so
that your middle score ends upbeing at least a 660.
You do nothing by rescoring justone of them to a 660.
Now he's going to have a highscore of a 660, and you do
nothing by rescoring all three.
(13:57):
Bureaus when you only need andthis is very important because
the cost for a rapid rescore canis anywhere between 40 and 50.
to 50 per trade line per euro,uh, 40 more if you're doing the
regular process, 50 if you'redoing it as a rush.
(14:21):
Uh, now this is importantbecause let's say you have to
rescore three credit cards orfour credit cards, and that's
four times 40.
That's 160 for one bureau,right?
If you do all three bureaus,that's 480, right?
(14:43):
So, and maybe you didn't need todo them or if you only need two
bureaus, that's 320.
So you, and this is reallyimportant because remember, uh,
remember that the borrower cannever pay for the cost of the
rapid rescore.
The rapid rescore is, uh,considered like a credit repair
type function.
Okay.
(15:04):
So, you know, the, I mean,that's something that can only
be ordered by the lender.
A borrower can never order oneand a borrower can never be
asked to pay for it.
As a matter of fact, if you goto the our credit vendor and you
input the borrower's creditcard, um, to pay for the rapid
(15:25):
rescore.
It's, it's gonna, it's gonnadeny it because you're going to
have to put the borrower's nameas the owner of that card and
all that kind of stuff.
The system is going to pick up.
Hey, that's our borrower isgoing to let you know you can't
charge the borrower and it'sgoing to cancel the order.
So, remember when you arelooking at, you know, the
(15:48):
potential for rapid rescore,remember that in the end.
The full cost of the rapid rescore is going to be paid by the
MLO.
So if you are doing a rapid rescore, You better make sure that
deal, uh, is a deal that canclose, right?
Don't, don't do like a wishfulthinking kind of a scenario
(16:10):
because you could find yourselfthree, four,$500 in the hole.
I mean, if you're only rescoringone or two accounts in one
bureau, that's not a really bigdeal.
But I mean, I've, I've had'emwhere they get into the hundreds
of dollars and, uh, it's not apleasant experience.
If the deal doesn't close andyou're out that money, so
(16:31):
remember, borrow can never payfor the cost now for automated
underwriting approval to pick upany of the changes to the
balances to the score todisputed accounts, uh, that are
removed from the system, likefor a conventional loan that you
got downgrade to manualunderwrite, because you have
(16:52):
disputed accounts.
Remember that, uh, the only waythat DU is going to pick up the,
um, the new score, the, thedisputed accounts removed, uh,
the balance is lower, whateverit is that you need, or the
payment's lower, if it's a DTIissue, whatever it may be, um,
(17:14):
the disputed account, you know,all of the information needs to
be updated via a rapid rescore.
Disputed accounts removed viaRapid Rescore, account balances
updated via Rapid Rescore so youcan get the new credit score to
be picked up by a DU or LP or toget the fact that the accounts
(17:35):
that were previously disputedare no longer disputed.
Rapid Rescore is the only way toget that done.
So like I mentioned, it can takeup to five days to complete.
A rush fee can be paid to try todo it between one and three
days.
Now, be very careful.
There is a no doc option,because to do the rapid rescore,
(17:59):
the borrower has to provide, hasto pay down the balances, if
it's paying down the balance,and then has to request a letter
from the, uh, credit companystating the new balance.
The letter has to clearlyidentify the account holder,
the, uh, the, uh, the accountnumber, has to be on, on their
(18:19):
letterhead.
And it has to state what the newbalance is.
They can fax it to them.
They usually don't email.
And if they send it through themail, that's the least desired
option is going to take, uh, uh,two weeks to receive.
So.
Once you get that letter, thenyou're ready to order the Rapid
Rescore to update the balance.
(18:41):
Now, if the borrower saysthere's no way I can get that
documentation, uh, there is a nodoc option, but with the no doc
option, you run the risk of anextended review period of up to
30 days if they cannot quicklyverify the information.
Then they would go to thecredit.
Company for verification and youknow, they have up to 30 days to
(19:05):
provide a reply.
So no doc is really not apreferred option.
It's like a last resort.
And it is absolutely impossibleto get the documentation.
Um, and, um, I already mentionedborrowers cannot order the
rescore.
And most importantly, now whenyou do pay for the rapid
(19:28):
rescore, they will include forthe cost of a new credit report
that will need to be ordered sothat you can obtain the new
credit scores.
That's the only way to get thenew credit scores is for a new
credit report to be generated.
So very good tool here todifferentiate yourself from the
masses, from the applicationtakers out there and make sure
(19:51):
you use it.
It's already included in theservices that we pay for.
Are there any questions on, uh,credit simulations or rapid
rescore?
Okay, well, I'll give it anotherminute to see if anyone, uh, has
(20:11):
any questions.
But again, like remember, it isa very good tool to use even if
the rescore doesn't getcompleted.
It's good.
Uh, to offer the creditsimulation to the borrower, the
cost of the services alreadyincluded in the credit report,
and it will, if the borrower isshopping around for different
(20:32):
loan quotes, and you're the onlyone that starts talking about
how we can, you know, offercredit simulation to see what
they can do.
That may be the deciding factorfor them to use you.
Instead of everyone else whothey may have spoken with
because everyone else is justtrying to get alone and you're
(20:53):
actually trying to help themout.
So I don't see any questionshere.
I hope, uh, everybody clearlyunderstood that.
And if not, please do reach outand we will provide additional
details.
Everybody have a great day.
So what exactly is a credit
(00:03):
simulator, right?
A credit simulator is a toolthat allows the NLO or the
borrower to simulate differentcredit scenarios.
and generates a simulated creditscore.
This is a great tool to use, uh,just so that you all know at the
(00:24):
mortgage calculator includedwith whatever credit report we
pull is a free score navigatorcredit simulation.
So, uh, what exactly is scorenavigator?
And actually let me back up asecond and let me, uh, explain
the importance of creditsimulations.
(00:46):
Not only To add value, you know,to for you to add value to the
transaction, but also you neverknow when something's going to
happen and you may need a coupleof extra points in the credit
score.
Maybe you do qualify for abetter program.
Or just to qualify at all, youknow, um, the file gets
(01:08):
underwritten.
Um, the, um, income drops forexample, and now you need a
higher credit score to maintainyour approval, right?
Because now the DTI is higher,right?
So higher DTI, if you're doingautomated underwriting.
(01:28):
It's going to look at the creditscore and either approve you or
not for that higher LTV loan.
For example, it might get that95 percent LTV.
Uh, and, uh, you have, uh, 48%DTI, you're gonna need a good
credit score, right?
You're gonna need 700 or above.
(01:50):
So you know, you may havethought the DTI was good, right?
But now all of a sudden they hityou with, hey, they cut your
income overtimes now what youthought it was.
And now all of a sudden yourborrower is not qualifying for
that, um, high DTI loan becausetheir credit score is below a
(02:11):
700.
So, it's always a good idea toexplore credit simulations in
the beginning of the processwith the borrower once you have
the credit, uh, report.
Identify opportunities and seeif it may, uh, be something that
the borrower wants toparticipate in.
(02:32):
And then you, as the mortgageloan originator, obviously have
to give the important points ofhaving the highest credit score
possible.
Okay.
It's not the first time thatI've seen a deal fall through
exactly for the reason that Istated and no credit simulation
was ever attempted in thebeginning and then all of a
(02:55):
sudden they want to do a creditsimulation and a rapid rescore
with 10 days left to closebecause of the income.
That got dropped, right?
So, um, you know, don't wait forthe last minute.
Uh, I would keep it as a bestpractice, uh, to do it.
You know, it's included in, inwhat we in the credit reports.
(03:15):
Like I stated, you just have toknow how to use the tool.
So score navigator is the creditsimulation tool.
That we have a score navigatorhas a couple of different, um,
tools within it, right?
You have the money simulatorwhere in the money simulator,
(03:38):
uh, you can enter how much moneythe borrower has to pay down on
debt.
And then the, uh, uh, systemwill, um, tell you what needs to
be done to with that amount ofmoney.
What's the best.
That can be done, right?
(03:58):
So it's, it's, it's analgorithm.
So for example, um, bar has 3,000 to pay down debt.
Okay.
You put 3, 000 they haveavailable.
The program gets to work and it,and it basically lets, you know,
okay.
With the 3, 000.
This is the best case scenariofor the borrower.
So that that's one of the creditsimulators that we have within
(04:22):
score navigator.
The other one, uh, another one,not the other one, another one
is target score simulator.
Now, if you all remember, uh, weused to have a couple other
systems before one was wayfinderand, and the other one was what
if so the target scoresimulator.
(04:45):
Is the, uh, wayfinder versionwhere it, you, you, you
basically state what is thescore that, that you're
targeting.
And the system calculates, uh,what needs to be done to reach
that score if it's even possibleto reach that score.
(05:06):
So it basically provides themost efficient path to reach the
desired target score goal byutilizing the fewest number of
accounts.
Uh, the results that you'regoing to receive.
Now, this is pretty cool here.
Now, the results you're going toreceive will include the
estimated credit score increase.
(05:27):
the cost to the borrower forfollowing the recommendations,
the maximum achievable score,and this is the cool one, and
the best estimated day of themonth to pull the credit.
Believe it or not, it doesmatter.
Obviously, the system is goingto calculate, is going to look
(05:48):
when the accounts.
Cycle, right?
So that the credit is pulled,uh, when the payments are made.
Now, another tool is the smartscore simulator, which is a
manual simulator.
This is similar to the old, uh,what if credit simulator that we
(06:10):
used to have?
Uh, this is one of my favoritesbecause with this one.
You can actually play aroundwith the balances, play around
with the accounts to see whathappens, right?
Uh, this is the true, uh, realinteresting one, because for
example.
You can change the balances tosee what happens to the credit
(06:33):
score and different accounts,because you all know when the
balances are all loaded up tothe close to the limit, it's
going to affect the creditscore, right?
Uh, so you definitely want tobring down those balances.
Now, one thing about balances Iam going to make note of is that
the only balances that are goingto affect your credit score.
(06:56):
Are going to be revolvingcredit, credit cards, not
installment balances, right?
Installment loans.
Actually, if an installment loanis paid off and the account is
closed, it can actually reduceyour credit score.
So never tell your borrowers to,uh, why don't you finish paying
(07:17):
off that car?
Why don't you finish paying offthat personal loan?
That's an installment loan.
Because you may actuallydecrease their credit score
because you're going to increasethe credit utilization, right?
Credit utilization is what we'retalking about here, the
balances.
The, the lower the creditutilization, the higher the
(07:39):
credit score.
If you eliminated installmentaccount of 5, 000, you just
eliminated 5, 000 of availablelimit, and the borrower still
has the same overall balances ontheir other accounts.
What's going to happen is theircredit score is going to drop
because the utilization hasincreased.
(08:01):
So in the Smart Score Simulator,we can change balances.
We can delete an authorizeduser.
On good accounts to to see whathappens or bad accounts.
I mean, a lot of times you yousee an authorized user account
that the bar is on and it'smaxed out, you know, you know,
(08:21):
eliminate that account or yousee an authorized user account,
uh, that has a derogatory on it,you eliminate that account, but
you can again.
Check on it in the system todelete it and see what would
happen to the credit score ifyou were to delete that account.
Now, another option, um, is toremove disputes, right, and see
(08:48):
what happens, because sometimes,you know, you, you, you're doing
a DU and it says remove thisdispute to try to get the, the
automated approval, but then ifyou go and you click to remove
the dispute, 50 points.
So at that point, you may notwant to remove the dispute, you.
(09:09):
And you may actually want to gowith the manual underwrite route
and keep the credit score whereit is, right?
You don't want to remove, again,removing a dispute is a double
edged sword.
Uh, now you can also click toremove a late payment to see
what happens to the credit scorein case the borrower can somehow
(09:32):
figure out some kind ofdocumentation to get, um, to get
that, uh, late payment removedvia a rapid rescore.
Or you can see what would happento the credit score if the, um,
late payment was removed.
Uh, Smart Score Simulator alsolets you see the best day to
(09:54):
pull credit, and it also letsyou see the best estimated date
to pull credit, right?
To, they sound the same, butthey're different, uh,
components there.
Now the other, um, tool, uh,which I think is sort of blocked
out there in the bottom there isthe mortgage action plan MAP.
(10:18):
The mortgage action planprovides suggestions on ways to
increase the score in the longterm.
So in other words, a mortgageaction plan is not something you
borrower for the long term.
To do a rapid rescore toincrease their credit score and
three to five days, which iswhat the rapid rescore does.
(10:39):
The mortgage action plan is justanother way.
For you to add value to thetransaction, uh, by providing
the borrower, uh, some goals forthe long term so they can
increase their credit score.
If, for example, they're notplanning on doing anything right
now, maybe they're going to doit in six months, uh, you can
(10:59):
give them that type of aconsultation.
Now, all of this that we'redoing here with the credit
simulator, again, right, addingvalue to the transaction, But
we're also preparing theborrower for a rapid rescore
right now.
What exactly is a rapid rescore?
(11:19):
A rapid rescore is a processwhereby the, the new balances on
the accounts are pushed to thecredit bureau.
Um, and updated within 3 to 5days.
Probably if you do a rush, it's3 days.
If you don't do it, or maybethat's a rush, could be 1 to 3
(11:41):
days.
The regular process 3 to 5 days.
So, obviously, if you're in aloan, uh, loan application comes
in credits, credit report comesin and you identify
opportunities, uh, for theborrower to be able to qualify.
So get, bring that, uh, get thatfive 80 up to a six 40, for
(12:03):
example, or get that five 50 upto a five 80 so you can.
Hopefully get and approveeligible for an FHA loan with 3.
5 percent down, which requires aminimum of a 580.
That's something you would do upfront.
Or if you get the unforeseencircumstance, like I mentioned,
your income drops, DTIincreases, now you don't qualify
and you got to increase yourcredit score.
(12:25):
The Rapid Rescore allows you toget the credit score updated,
uh, within a short period oftime so that hopefully the
borrower can close.
Now, you got to understandthere's three credit bureaus,
right?
TransUnion, Equifax, andExperian.
They have different algorithms,so whatever change is done on
(12:50):
one bureau isn't necessarilygoing to have the same result.
And it's really important toknow that you only want to
rescore the bureaus that need tobe increased.
You don't have to do all three.
Right?
So what do I mean by that?
Okay, let's say, for example.
You need at least a six 60credit score for A DSE for a,
(13:13):
let's say, a non QM loan to geta 80% LTV.
But, uh, your borrower has a six40, a 6 55, and a 6 55 and a six
40 Equifax, 6 56 55 Experian,and 6 55 TransUnion.
If you need a middle score of atleast a 660, you're going to
(13:34):
have to do the Equifax and theTransUnion.
You're going to have to rescoreboth bureaus that are 655, so
that your middle score ends upbeing at least a 660.
You do nothing by rescoring justone of them to a 660.
Now he's going to have a highscore of a 660, and you do
nothing by rescoring all three.
(13:57):
Bureaus when you only need andthis is very important because
the cost for a rapid rescore canis anywhere between 40 and 50.
to 50 per trade line per euro,uh, 40 more if you're doing the
regular process, 50 if you'redoing it as a rush.
(14:21):
Uh, now this is importantbecause let's say you have to
rescore three credit cards orfour credit cards, and that's
four times 40.
That's 160 for one bureau,right?
If you do all three bureaus,that's 480, right?
(14:43):
So, and maybe you didn't need todo them or if you only need two
bureaus, that's 320.
So you, and this is reallyimportant because remember, uh,
remember that the borrower cannever pay for the cost of the
rapid rescore.
The rapid rescore is, uh,considered like a credit repair
type function.
Okay.
(15:04):
So, you know, the, I mean,that's something that can only
be ordered by the lender.
A borrower can never order oneand a borrower can never be
asked to pay for it.
As a matter of fact, if you goto the our credit vendor and you
input the borrower's creditcard, um, to pay for the rapid
(15:25):
rescore.
It's, it's gonna, it's gonnadeny it because you're going to
have to put the borrower's nameas the owner of that card and
all that kind of stuff.
The system is going to pick up.
Hey, that's our borrower isgoing to let you know you can't
charge the borrower and it'sgoing to cancel the order.
So, remember when you arelooking at, you know, the
(15:48):
potential for rapid rescore,remember that in the end.
The full cost of the rapid rescore is going to be paid by the
MLO.
So if you are doing a rapid rescore, You better make sure that
deal, uh, is a deal that canclose, right?
Don't, don't do like a wishfulthinking kind of a scenario
(16:10):
because you could find yourselfthree, four,$500 in the hole.
I mean, if you're only rescoringone or two accounts in one
bureau, that's not a really bigdeal.
But I mean, I've, I've had'emwhere they get into the hundreds
of dollars and, uh, it's not apleasant experience.
If the deal doesn't close andyou're out that money, so
(16:31):
remember, borrow can never payfor the cost now for automated
underwriting approval to pick upany of the changes to the
balances to the score todisputed accounts, uh, that are
removed from the system, likefor a conventional loan that you
got downgrade to manualunderwrite, because you have
(16:52):
disputed accounts.
Remember that, uh, the only waythat DU is going to pick up the,
um, the new score, the, thedisputed accounts removed, uh,
the balance is lower, whateverit is that you need, or the
payment's lower, if it's a DTIissue, whatever it may be, um,
(17:14):
the disputed account, you know,all of the information needs to
be updated via a rapid rescore.
Disputed accounts removed viaRapid Rescore, account balances
updated via Rapid Rescore so youcan get the new credit score to
be picked up by a DU or LP or toget the fact that the accounts
(17:35):
that were previously disputedare no longer disputed.
Rapid Rescore is the only way toget that done.
So like I mentioned, it can takeup to five days to complete.
A rush fee can be paid to try todo it between one and three
days.
Now, be very careful.
There is a no doc option,because to do the rapid rescore,
(17:59):
the borrower has to provide, hasto pay down the balances, if
it's paying down the balance,and then has to request a letter
from the, uh, credit companystating the new balance.
The letter has to clearlyidentify the account holder,
the, uh, the, uh, the accountnumber, has to be on, on their
(18:19):
letterhead.
And it has to state what the newbalance is.
They can fax it to them.
They usually don't email.
And if they send it through themail, that's the least desired
option is going to take, uh, uh,two weeks to receive.
So.
Once you get that letter, thenyou're ready to order the Rapid
Rescore to update the balance.
(18:41):
Now, if the borrower saysthere's no way I can get that
documentation, uh, there is a nodoc option, but with the no doc
option, you run the risk of anextended review period of up to
30 days if they cannot quicklyverify the information.
Then they would go to thecredit.
Company for verification and youknow, they have up to 30 days to
(19:05):
provide a reply.
So no doc is really not apreferred option.
It's like a last resort.
And it is absolutely impossibleto get the documentation.
Um, and, um, I already mentionedborrowers cannot order the
rescore.
And most importantly, now whenyou do pay for the rapid
(19:28):
rescore, they will include forthe cost of a new credit report
that will need to be ordered sothat you can obtain the new
credit scores.
That's the only way to get thenew credit scores is for a new
credit report to be generated.
So very good tool here todifferentiate yourself from the
masses, from the applicationtakers out there and make sure
(19:51):
you use it.
It's already included in theservices that we pay for.
Are there any questions on, uh,credit simulations or rapid
rescore?
Okay, well, I'll give it anotherminute to see if anyone, uh, has
(20:11):
any questions.
But again, like remember, it isa very good tool to use even if
the rescore doesn't getcompleted.
It's good.
Uh, to offer the creditsimulation to the borrower, the
cost of the services alreadyincluded in the credit report,
and it will, if the borrower isshopping around for different
(20:32):
loan quotes, and you're the onlyone that starts talking about
how we can, you know, offercredit simulation to see what
they can do.
That may be the deciding factorfor them to use you.
Instead of everyone else whothey may have spoken with
because everyone else is justtrying to get alone and you're
(20:53):
actually trying to help themout.
So I don't see any questionshere.
I hope, uh, everybody clearlyunderstood that.
And if not, please do reach outand we will provide additional
details.
Everybody have a great day.
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