Check Credit On Payor Before Buying A Note?
I am in the process of buying a note which is sescured a piece of agriculture land, I have received following from the note seller:
1) copy of the Note;
2) copies of payment checks(3);
3) copy of Note amortization schedule
4) Social security numbers of the borrower/payor(hudsband & wife), but without a credit report.
My question is: Can I order a credit report on a Note payor, without contacting them and obtain their consent?
Thanks for your feedbacks.
Joe
Do you have an account with a credit reporting agency you usually use? If yes, contact them. If not then probably not. For the first few times the agencies are pretty strict about releases.
The seller of the note as a creditor, should have the right to pull the credit report. (credit card companies do it all the time in determining whether or not to raise your interest rate). I would make it clear to the present note holder that before you purchase the note you require a recent credit report for the borrowers. Some notes I buy I really don't care of the credit situation, as I am looking to capitalize if the note defaults.
Very good points! thanks both of you commercialking and skosmicki.
The Federal Fair Credit Reporting Act (FCRA)
http://www.ftc.gov/os/statutes/fcra.htm#604
Section 604 (a) (3) (E)
appears permissible to obtain credit for someone
"intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with,
an existing credit obligation, "
So, a potential note buyer can order a credit report without note maker's consent on fair use basis - for the purpose of evaluating or assessing the credit or prepayment risks involved in existing credit obligations.
Correct?
I completely agree it's totally OK to get credit on anybody whose note or contract I'm contemplating buying.