When you apply for a mortgage, your lender wants to see a snapshot of your financial health that’s as comprehensive as possible. As a vital part of evaluating your creditworthiness, mortgage lenders may look at your residential mortgage credit report (RMCR). Even though “credit report” is part of this name, it’s not the garden-variety credit report with which you’re probably familiar. An RMCR is a credit report that gives your lender a more in-depth look at your finances by including more information than other types of credit reports.
TL;DR (Too Long; Didn't Read)
A residential mortgage credit report is an in-depth report containing information other than just credit data that mortgage lenders use to help qualify a lender.
RMCR Vs. Other Credit Reports
The three primary credit bureaus – Equifax®, Experian® and TransUnion® – provide consumer credit reports to lenders as well as to consumers. Because of the way these credit bureaus report financial data, a consumer may have three different credit scores. A tri-merge credit report compiles the data from these three credit bureaus into a single credit report. The RMCR goes into more detail by including information not found on consumer credit reports or the tri-merge report.
Why Do Lenders Use RMCR?
If you’re applying for a credit card, for example, the card issuer needs a peek at your credit score as well as basic credit information, such as your debts and payment history, to approve or deny your application. But if you’re applying for a mortgage, the ball game just got bigger than simply applying for a credit card. A mortgage is a much larger commitment, typically the biggest financial commitment a consumer will make over a lifetime, and it carries more risk for a lender. The RMCR offers more details than a consumer credit report to give your lender more data on which to base its mortgage approval or denial.
What's on an RMCR?
Freddie Mac and Fannie Mae establish guidelines for RMCR compliance to ensure that conventionally underwritten mortgages meet their loan requirements. Freddie and Fannie note that an RMCR is a detailed account not only of a borrower’s credit history but also of his employment, residence history and public records information such as bankruptcies.
Credit information gathered from two of the national credit bureaus is merged and forwarded to a consumer reporting agency to be verified before it's sent to the lender. Other than credit data, an applicant's (and co-applicant's) age, marital status, number of dependents, employer and length of employment are listed on an RMCR. If a borrower has had a change of employment in the past two years, the RMCR provides the borrower's previous employer. And aside from his current address, a former addresses are also provided.
How to View Your RMCR
You may have ordered your consumer credit report through an online service to check your credit score and to make sure that all the information was correct. This type of credit report is directly available to consumers. But an RMCR follows a different path.
Third-party intermediaries, known as mortgage reporting companies, compile an RMCR when a lender orders one, but this report is not available directly to the consumer. Since the lender pays for the report, the lender may not provide you with a copy. But because your RMCR will let you see how lenders view you, it may help to see this information. You cannot demand access to it, but it doesn’t hurt to ask your lender if you can see your RMCR.
Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.