April is financial literacy month, which means consumers will be barraged with articles and programs designed to promote personal finance education. While this typically includes learning how to budget, manage credit cards, pay down loans, and plan for retirement, this month should also be a time for consumers to focus on policy issues that could prevent homeownership.
Many consumers desire to purchase a home. As part of the home-buying process, consumers should expect their credit scores to be pulled. Credit scores determine a loan offer, down payment requirements and interest rates.
What some consumers may not know is that mortgage lenders often sell mortgages to provide liquidity and free up capital, thereby expanding access to loans. Fannie Mae and Freddie Mac (the Enterprises) purchase many of these mortgages, holding 57 percent of the mortgage market. The Enterprises have rules the mortgage lender must follow before they purchase a mortgage. One of these requirements is to pull a Tri-Merge Credit Report as part of risk determination.
Leah Locke is a Policy Analyst with the American Consumer Institute, a nonprofit education and research organization. Follow Leah on X @leahmlocke.