Well-qualified borrowers with good loan-to-value ratios and steady employment are increasingly finding it difficult to refinance because of medical billing mistakes impacting their credit reports and scores, according to mortgage bankers and real estate agents.
- Nearly 14 million Americans have errors on their credit report due to medical collections, according to the Commonwealth Fund, a non-profit organization focused on health care research.
- Unnoticed credit errors, such as small, unpaid balances on medical bills, can make refinancing a mortgage difficult or, in some instances, impossible. If approved for a refinance, unpaid bills can result in the borrower paying higher closing costs.
- It is critical that consumers routinely review their credit reports to ensure the reports are accurate and up-to-date. Consumers are entitled to one free credit report annually from https://www.annualcreditreport.com/cra/index.jsp. The report does not include the credit score; however, the score can be obtained for a small fee.
- The U.S. House of Representatives passed a bill this fall that could provide relief for homeowners with medical-debt troubles. The Medical Debt Relief Act, which is currently in the Senate, would remove settled medical debt from credit reports after 45 days, instead of the customary seven years.
For all your real estate needs
Call John J. O’Dell
Real Estate Broker