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Repositories Tighten Physical Inspections Requirements

Effective November 1, 2005 the credit repositories (Experian, Trans Union and Equifax) have significantly tightened the due diligence requirements for all mortgage brokers and lenders desiring access to credit data. While physical inspections have been required for many years, the standards for approval have been increased. These new rules apply to all credit reporting agencies. Key changes include,

• Users of credit data must be located at a commercial address. Brokers operating from a residence are prohibited from establishing access to credit data. Shared office environments where the tenant does not have permanently assigned physical space does not meet repository requirements. 
• Inspections now must be completed by independent, third-party inspection firms certified by all three repositories. The cost of the mandatory physical inspection is $100.00.
• Each individual net-branch locations must be inspected
• The new inspection requirements apply to all mortgage brokers and lenders regardless of size, years in business or location. Both existing accounts, as well as new applications require the completion of a new physical inspection.
• Should a mortgage broker or lender change location, a physical inspection is required on the new location.

The physical inspection checklist includes,

1. Physical location - Address type, permanency, and active status of location. Types of products/services marketed
2. Special attention to any indication of non-permitted activities such as credit repair including a review of web sites and advertising
3. Verification of licensing
4. Security - Physical security mechanisms, practices for securing and disposing of confidential information (i.e. shredder on site, lockable files, computers password secured with non-stored passwords.) 
5. Personnel behavior and accessibility - Demeanor of the contact and staff prior to and during inspection
6. Photographs - Digital photographs of interior and exterior of business

In addition to tightened physical inspection requirements, additional repository compliance audits are being conducted. These audits are designed to insure consumer information is obtained and used by the subscriber for the permissible purpose indicated (i.e. Mortgage.) This includes the use of "secret-shopper' programs to detect those engaged in prohibited activities such as credit repair. Should you be audited by one of the repositories, you will be required to provide at least one of the following,

1. Original credit application or mortgage/HUD  form 1003
2. Detailed loan officer notes
3. Screen-shots containing information regarding the applicant.

Should a broker or lender fail to meet the minimum physical inspection requirements, or during an audit - fail to provide the required documentation, the repository has the option of terminating access to credit data. Should that occur, you would be prohibited access to credit data through any credit reporting agency.

Please remember, these requirements are established directly by Experian, Equifax and Trans Union. Credit Technologies has no discretion in the application of these requirements. For questions regarding this subject, or any Credit Technologies product or service, please contact us toll-free at 800.445.4922, via e-mail or use our live help system for instant answers.

Thank you for considering Credit Technologies, we look forward to helping you close more loans.