Beginning June 1, 2010, just before settlement, Fannie Mae will be running last minute credit report checks to ensure borrower’s credit has not changed since loan application.

Though I tell my clients not to go open lines of credit before settlement, because I know many times there is a spot check, this is a new policy that could affect many loan applicants. The purpose is to find out whether the borrower has accrued or shopped for new debt.

Many homebuyers get excited once they have an accepted contract on a home, and realize they will need new furniture and decorations for the house. What some do not realize is that they should not open an account at a store or make these large purchases because they effect their debt-to-income ratios for their loan.

Now, if a Fannie Mae homebuyer does this, they risk a delay in settlement as the lender does more research and reviews the file further, creating problems for themselves and the sellers of the house they are buying.

The Washington Post reported on this new policy, and make a few notable points.

Fannie’s “loan quality initiative” will require lenders not only to pull two credit reports for each mortgage transaction but to perform additional verifications of borrower occupancy plans for the property, Social Security numbers and Individual Taxpayer Identification Numbers.

Essentially, to ensure you get your dream home and close on the house, DO NOT open or apply for ANY lines of credit from the time you make loan application and closing. That is the only safe route!