Julie Wallace and her team over at Premier Nationwide Lending sent us some information we would like to share with you:

Applying for mortgage? Starting June 1, you could face another credit screening.

If you’re thinking about applying for a home mortgage, here’s some important news: Beginning June 1, 2010, your lender is likely to order a second full credit screening immediately before closing. The last minute credit report will be designed to find out whether you have obtained, or even shopped for, new debt between the date of your loan application and the closing. If you’ve made applications for credit of any type, for furnishings or appliances for the new house, car, landscaping, a home equity line, a new credit card, you name it-the closing could be put on hold pending research by the lender.

If you’ve actually taken out new loans that are sizable enough to affect the debt-to-income ratio calculations used in your original mortgage approval, the whole deal could fall through. The added debt load could render you ineligible for the mortgage because you suddenly appear unable to handle the payments without a strain on your household budget.

The June 1 changes are part of a new effort by mortgage giant Fannie Mae to cut down on slipshod underwriting by lenders and fraud by borrowers. Fannie’s “loan quality initiative” will require lenders not only to pull two credit reports for each mortgage transaction but to perform additional verifications of borrower occupancy plans for the property, Social Security numbers and Individual Taxpayer Identification Numbers.

There is almost an irresistible urge for borrowers that have been approved for the loan to think about shopping for all of the things you need for the house. In the past, that might not have raised an eyebrow-or even been detected. But under the new double-check policy, when new applications for cards show up as a “hard”, or borrower-initiated inquiry on a credit report, the lender is going to have to contact the merchant and determine whether credit was extended, in what amount, and how this might affect the applicant’s home financing transaction. Most often the new debt involves furniture or other goods for the new house.

Fannie Mae spokeswoman Janis Smith said lenders “will have to look for things like new credit accounts, increased credit lines, increased balances on existing accounts, undisclosed or newly recorded liens, second mortgages-anything that may have incurred or closed up to the concurrent with the closing” are considered the final loan analysis. All of this may not be as straightforward as it sounds. For example, if the credit report is pulled immediately before closing to comply with the “up to and concurrent” requirement, there may not be sufficient time to check out inquiries-especially those in which no actual drawdown of debt has been reported to the national credit bureaus. There is question whether the entire loan packages might need to be re-underwritten-a time-consuming process-based on credit data discovered at the eleventh hour.

In that event……… Poof goes your closing!

How should home buyers and financers prepare for the new credit check procedures? Lenders and credit reporting company executives say everybody needs to follow just one basic rule: abstinence! Between your application for a mortgage and the date of closing-which might be a span of 46 to 60 days or more-resist the irresistible. Don’t apply for new credit unless you discuss it in advance with your lender and get a green light!