Should I Tell My Loan Officer About The Loan That’s Not On My Credit Report?
April 24th, 2007 by Mark Flanders
It doesn’t happen often, but occasionally credit reports are missing some information. What about child support from before your current marriage? That doesn’t show up at all on a credit report. Should you tell the loan officer or just keep it to yourself. If it’s not on the report it doesn’t count, right?
Your loan and your credibility are at risk
You can go to jail if you deliberately withhold information from your mortgage application. It is called fraud and it’s not worth the risk. If you have ever wondered whether or not you must let a loan officer know about something that isn’t on you credit report, now you have the answer. Everything you know about your debts or obligations, regardless of if it may be on your credit report, must be disclosed to your lender. The lender is considering lending you thousands of dollars and has the legal right to full information. If that lender makes a decision to loan you money and finds out later that you withheld pertinent information, you could still go to prison.
Think of it this way. If a friend of yours asked you for a loan, but didn’t tell you something financially critical like they just totalled their car after a hard night of partying and need to get another one as soon as possible. And they didn’t tell you until after you gave them money. You’d be pretty ticked off, wouldn’t you? I would be. Without a car, your friend probably can’t get to work. And no work means no money. So of course you are going to wonder how they’ll pay you back.
A mortgage lender is in exactly the same position. They are making a decision based on a lie of omission.
Here’s the good news
Your loan officer can probably get your loan approved anyway. There are so many creative loan programs available these days, your debt ratio may not be as bad as you think, to a lender. If the lender agrees to make a loan after you have told everything there is to tell about your debts, you have nothing at all to worry about. The lender knows what he needs to know and fraud is no concern of yours.
So, if you have ever wondered about that hidden obligation or been tempted to keep it all to yourself, go with the honest solution and let the loan officer do his or her job. It works better for everybody involved. The honest solution allows you to stay out of jail and live in a nice house. The other decision? Well…..visitors are allowed!
Tags: kitsap real estate blog, mortgage fraud, real estate fraud, seattle real estate blog, silverdale real estate blog
[...] Should I Tell My Loan Officer About The Loan Thats Not On MY Credit Report by Buckwheat for SoundBiteBlog [...]
Great post Buckwheat. I imagine you see this as alot. Even as the realtor, when screening borrowers I run across alot of personal loans that would not hit the credit report. Most of them don’t feel any obligation to report it. They consider it a “white lie”. It’s just not worth the risk of a visit to club fed. Honesty and integrity rules.
eye catching graphic Sparkwheat.
Bucky – Your graphic is GREAT…LOVE the picture. It illustrates your post so well.
Can I use it on a PowerPoint deck I’m putting together?
Pretty good article. Who’s the girl?
Great article, Buckwheat! Sweet graphic. Very practical illustration. I imagine that many Buyers are tempted to fudge on their credit history/information, simply out of embarassment. But as you say, honesty is ALWAYS the best policy!