In an effort to cut down on fraud by borrowers and tighten underwriting criteria, lenders will require a second full credit report just prior to closing escrow. This is part of Fannie Mae’s “loan quality initiative” (LQI) which takes effect June 1st.

Lenders are concerned that  mortgage borrowers shop for things they need for their anticipated new home – often furniture or even a car – possibly thousands of dollars worth of purchases . The home buyer often will open up a new credit account, thus affecting the borrower’s debt-to-income ratio.

What should a home buyer do? The rule of thumb is – abstinence, resist the spending until after escrow closes! Read Fannie Mae’s FAQs on this topic.