In December 2013, in what appears to have been a coordinated attack, Target, Neiman Marcus, and at least three other well-known US retailers were the victims of a major cyber security breech.
While estimates vary, it’s believed at least 110 million customers and card-holders had their personal information exposed during the data breach.
Since the attack, retailers and many large credit card banks have taken measures to inform customers and card-holders of their potential risks and what they can do to protect themselves from ID theft.
Unfortunately, these same steps would likely prevent home buyers from qualifying for a mortgage!
For example, consumers affected by this security breech have been told to:
- Add a Fraud Alert to your credit profiles with Trans Union, Equifax, and Experian. When you (or an impostor) attempts to obtain credit in your name, lenders should take steps to verify you have authorized the request. If the creditor cannot verify this, the request should not be satisfied.
Unfortunately, due to conflicting federal laws regulating financial services and privacy, this seemingly simple verification process may prove difficult if not impossible for a lender! Often the underwriter or others at the mortgage lender are not authorized to contact you directly. Some lenders may require you undertake a number of difficult and time-consuming steps to satisfy the requirement of verifying you are who you claim to be.
- Dispute the fraudulent charges or accounts with the credit bureaus. When Trans Union, Equifax, or Experian receive a dispute request, an investigation is initiated to verify the accuracy of this information. While these investigations should take no more than 30 days, they often take much longer. Unfortunately, even when a dispute is resolved, the comments regarding the dispute often remain on your credit report for months or years! Most importantly, while a specific account or line item is in a disputed status, the disputed account is not included in your credit score calculations. This produces inaccurate credit scores of which Fannie Mae and Freddie Mac will NOT accept.
BOTTOM LINE: Unless and until these disputes are resolved and removed from your credit report, your mortgage and closing will be delayed.
If you’re planning on applying for a mortgage in 2014 and believe you’ve been a victim of the Target security breech or any of these other December 2013 security breaches, then we need to talk as soon as possible. Contact my office immediately. Do NOT wait until you’re ready to apply for a mortgage.
While I’m certainly not advising you to not take the appropriate steps to protect your credit and identity, I WILL explain the corrective steps you’ll need to take in order to ensure the mortgage you eventually plan to apply for goes smoothly and stress-free.
Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.