This summer, Fannie Mae instructed lenders that they should adopt a new policy that would include a second review of an applicant’s credit report just prior to closing. Why? The answer is simple: the credit profile of a borrower may have changed between the time of the initial review of the credit report and the time of closing.

The potential impact to a borrower who has utilized credit to make significant purchases after the initial credit report could include:

* A delay in closing
* Increase of closing costs and/or interest rate
* A decreased loan amount
* Denial of the loan

That’s right, in the worst-case scenario, a change in credit could even result in a loan being denied – even after an original approval had been granted.

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