With the 400% increase in cost for wholesale credit bureau reports, it is important for Loan Originators to start a new (or maybe it is old) practice.
Many LO's run credit for prequalifying borrowers without collecting that money upfront. However, this new increase could result in a $100 per borrower cost. That means for every borrower/co-borrower pair, you are going to be upfronting $200!!!! I know LO's that prequal anywhere from 3 to 10 borrower pairs a month. That translates into $600 to $2000 per month of cost for you. Of course you do get reimbursed for this fee if you close the loan, but in this market that is a big "IF".
What you may not know (or remember from your license education) is that you can collect that prequalifying credit report fee upfront, before disclosures go out. This is the ONLY fee you are allow to collect upfront. I recommend you start this practice.
Collecting this fee up front does two things:
It mitigates your cost for credit report fees issued during prequalifying, even if you don't end up closing the loan.
It will weed out borrowers who are not serious. If they have to upfront $100 to $200 to be qualified for a loan, they will likely not want to waste that money shopping around to other lenders!
I have prepared a form for you to use that explains why you are collecting the fee upfront, and helps you collect the credit card information you need to input into your credit reporting service. https://www.easy-mlp.com/_files/ugd/60953e_1796c389249742139476b189493b9bd3.pdf
I hope this information and form helps you lower your out of pocket costs.
Merry Christmas and Happy New Year!!
Comments