CreditDisputes‐ Non‐DerogatoryDisputedAccounts
Whatisneeded?
• Documentationtosupportthe
reasonandbasisofthedispute
withthecreditor.
• DeterminetheImpact
• Includetheminimummonthly
paymentstatedonthecredit
report,fivepercentofthebalance
oftheaccount,ortheamount
documentedfromthecreditor
Thedisputedaccountisconsiderednon‐derogatory
ifoneofthefollowingapply:
• Thedisputedaccounthasazerobalance;
• Thedisputedaccountstates“paidinfull”or
“resolved”onthecreditreport;
• Thedisputedaccountwithlatepaymentsareaged
24monthsorgreater;
• Thedisputedaccountiscurrentandpaidasagr
eed.
Non‐DerogatoryDisputedAccounts
IftheLoanOriginatorcandeterminethenon‐derogatorydisputedaccountacceptable,
theycanproceedwithunderwriting
HB‐1‐3550,Paragraph4.12 B states that consumers also have the right to dispute
information on their credit report, which they believe to be inaccurate. This can be
done directly with the furnisher of credit, as well as a consumer reporting agency.
Generally, disputes are investigated by the consumer reporting agency(s) within 30 to
45 days of receipt of the notice of dispute from the consumer; and written results of
the investigation are provided to the consumer within 5 business days after
completion of the investigation. For more information visit https://www.ftc.gov/ and
also, https://www.consumerfinance.gov/askcfpb.
If the applicant has a non-derogatory disputed account, the Loan Originator can
determine the non-derogatory disputed account acceptable and proceed with
underwriting. The disputed account is considered non-derogatory if one of the
following apply.
The disputed account has a zero balance;
The disputed account states "paid in full" or "resolved" on the credit report;
The disputed account with late payments are aged 24 months or greater; or
The disputed account is current and paid as agreed.
The applicant must provide the Agency with applicable documentation to support
the reason and basis of the dispute with the creditor. The Loan Originator must
determine the impact of the disputed account on the repayment of the proposed
mortgage debt. The Loan Originator must include the minimum monthly payment
stated on the credit report, five percent of the balance of the account, or the amount
documented from the creditor for each account.
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