Does the Equifax Breach have effects on mortgage lenders?

Equifax breach and mortgage effects

Equifax, one of the most trusted credit reporting agency in the world just announced that they might have been hacked again.  The latest Equifax breach  might have compromised a total of over 150 million users.  Just a month ago, the same company admitted another breach.  Being the oldest of the three largest credit agencies, this might have a ripple effect on the mortgage industry and on mortgage lenders.

Compromised borrower date is the worst case scenario that we might have since Equifax provides mortgage lenders with a 360-degree view of a borrower’s credit, capacity and collateral.


Extent of Equifax Breach

According to available sources online the latest cyber attacks foresees on the customer’s online help page.  The help page gathers name, e-mail and information of customers.  Last September about 145 million people had already been affected by the breach and this second one was not yet determined as to how many are affected and to what extend.


Equifax breach and mortgage effects
Digital Visualization of Identity Theft

Equifax data beach exposed customers names, birthdates, addresses, driver’s license numbers, Social Security numbers and more. As a way to compromise with the data breach, the company pledge to improve cyber security protection and also offered a free credit-locking service and is available for life as long as you sign up by January 31, 2018.


Mortgage Industry and the Equifax Breach

Since Equifax is one of the agencies that provides a credible and good source for borrowe’s credit score, the Equifax Data Breach may create a big fear among borrower’s to use and enroll in their system.  Worst, the second attack might show that the company still failed to protect its clientele despite their pledge to improve security.

If as a home buyer or borrower your information was compromised, financial thieves can use that information to steal thousands of dollars at your expense.  As a result your credit score will go down, thus affecting your loan approval.  If this happens mortgage lenders will be looking at credit scores and credit data that are unreliable and compromised therefore making misinformed decisions.

Here are some of the possible effects this breach has on mortgage lender clients

  • Use your credit card to create new debts which affects your credit score and debt to income ratio.
  • Use your date to create money through credit which affects your FICO credit score  and “utilization ratio”


Actions needed
Equifax breach and mortgage effects
Basic Security Diagram

Strengthening Equifax cyber security and finding the root cause of the attacks is key to solving this.  Addressing vulnerability in the system may just do the trick. Prioritizing help and assistance for affected customers to create ways to secure their data and identify possible fraudaulent is important.

If they found fraud in certain customer accounts they should immediately coordinate with them.  Also, immediate assistance  in correcting it should be provided.  The aim is to immediately correct their credit rating.

It is very important for mortgage lenders like us to have the correct credit score and date of borrowers .  In conclusion, having the wrong data is the worst case scenario a mortgage lender faces when approving loans.

Let us all unite in helping prevent future date theft which truly affects both lenders and borrowers.

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