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Realtors Advocate Greater Disclosure Under Fair Credit Reporting Act
June 19, 2003 — WASHINGTON - The National Association of Realtors® announced today that it supports amending the Fair Credit Reporting Act (FCRA) to require greater transparency and disclosure in the consumer credit scoring and reporting system.
Mortgage lenders and insurance companies are increasingly using credit-scoring models to determine whether to lend or offer homeowners' insurance to prospective homebuyers. Credit scores have become crucial not only to a consumer's ability to secure a decent mortgage, but also to a consumer's ability to obtain homeowners' insurance, without which he or she cannot obtain mortgage financing.
NAR recently convened an Insurance Task Force to examine the availability and affordability of homeowners' insurance in response to complaints from Realtors® that the lack of homeowners' insurance has become an obstacle to homeownership.
In a letter delivered earlier this week to both houses of Congress, NAR President Cathy Whatley explained that "consumers are experiencing delayed or cancelled home settlements due to the unavailability of affordable insurance." In fact, a recent study conducted by the Independent Insurance Agents and Brokers Association of America found that nearly 2.5 million consumers lost their homeowners' insurance over the last 24 months.
NAR's Insurance Task Force found that the increasing use of scoring models by insurers and others has created unintended consequences for consumers. "Because consumer databases have grown and their uses have widened, accurate consumer information is essential to both consumers and businesses," said Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla. "It has been long standing policy at NAR to promote transparency in the mortgage and home-buying process."
NAR supports amending the FCRA, which is up for reauthorization this year, to require strong consumer disclosures on credit and insurance scores; shortened time frames for consumer reporting agencies to investigate and correct consumer credit reports; stronger penalties for entities that repeatedly provide incorrect information to consumer reporting agencies; fairer treatment of consumers' multiple shopping inquiries for the best mortgage or insurance rate; and one free consumer report and credit score annually upon request of the consumer.
"These amendments would assist the consumer in discovering and correcting inaccurate information, and aid their ability to compile a complete and truthful consumer profile," Whatley said. "Since it is the consumer's information that is being compiled, that consumer should not have to pay to review it for accuracy. Public policy should provide an incentive to consumers to monitor their consumer reports."
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing over 900,000 members involved in all aspects of the residential and commercial real estate industries.
Source: Association Press Release
June 19, 2003 — WASHINGTON - The National Association of Realtors® announced today that it supports amending the Fair Credit Reporting Act (FCRA) to require greater transparency and disclosure in the consumer credit scoring and reporting system.
Mortgage lenders and insurance companies are increasingly using credit-scoring models to determine whether to lend or offer homeowners' insurance to prospective homebuyers. Credit scores have become crucial not only to a consumer's ability to secure a decent mortgage, but also to a consumer's ability to obtain homeowners' insurance, without which he or she cannot obtain mortgage financing.
NAR recently convened an Insurance Task Force to examine the availability and affordability of homeowners' insurance in response to complaints from Realtors® that the lack of homeowners' insurance has become an obstacle to homeownership.
In a letter delivered earlier this week to both houses of Congress, NAR President Cathy Whatley explained that "consumers are experiencing delayed or cancelled home settlements due to the unavailability of affordable insurance." In fact, a recent study conducted by the Independent Insurance Agents and Brokers Association of America found that nearly 2.5 million consumers lost their homeowners' insurance over the last 24 months.
NAR's Insurance Task Force found that the increasing use of scoring models by insurers and others has created unintended consequences for consumers. "Because consumer databases have grown and their uses have widened, accurate consumer information is essential to both consumers and businesses," said Whatley, owner of Buck & Buck Inc. in Jacksonville, Fla. "It has been long standing policy at NAR to promote transparency in the mortgage and home-buying process."
NAR supports amending the FCRA, which is up for reauthorization this year, to require strong consumer disclosures on credit and insurance scores; shortened time frames for consumer reporting agencies to investigate and correct consumer credit reports; stronger penalties for entities that repeatedly provide incorrect information to consumer reporting agencies; fairer treatment of consumers' multiple shopping inquiries for the best mortgage or insurance rate; and one free consumer report and credit score annually upon request of the consumer.
"These amendments would assist the consumer in discovering and correcting inaccurate information, and aid their ability to compile a complete and truthful consumer profile," Whatley said. "Since it is the consumer's information that is being compiled, that consumer should not have to pay to review it for accuracy. Public policy should provide an incentive to consumers to monitor their consumer reports."
The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing over 900,000 members involved in all aspects of the residential and commercial real estate industries.
Source: Association Press Release