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Under Fannie Mae's new Loan Quality Initiative (LQI) that went into effect on June 1, 2010, lenders are pulling a second credit report on the buyer right before closing to verify that the buyer's credit status has not changed and that all debts were disclosed. In other words, the buyer is not officially approved for the mortgage until the second credit report is approved. The lender may also re-verify job status and check other sources to make sure there are no undisclosed debts.

Other lenders also have been known to pull second credit reports right before the closing, but the Fannie Mae LQI will likely cause many more lenders to conduct last-minute verifications.

What this means for buyers is that they are well advised to not make any major purchases or apply for new credit until after closing. For instance, applying for a new credit card may lower a buyer's credit score. Under the LQI, the lender could delay the closing, increase the interest rate or the down payment, or even cancel the closing, depending upon the actual change.

"It seems everywhere is requiring credit checks nowadays. Credit inquiries, although not a serious hit, still can reduce a credit score. I was setting up my utilities before closing, and each one of them requested a social security number and credit check to get utilities set-up. I refused to have them check my credit, and instead paid the cash deposit for setting up a new account. I get the deposit back in 4-6 months, and it prevented any dings to my credit before closing." -Scott MacCallum (recent home buyer)