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Equifax breach and the Real Estate market

Key in LockIn light of the Equifax breach, the Post Independent published a comprehensive guide for steps to secure your information.  Despite following all the steps, the fact remains that 143 million people had data compromised and the raw material for fraud is available for sale now.

Washington Post article  by Kenneth Harney outlines how the Equifax data breach can reverberate through the real estate industry.  If your data has been stolen and a line of credit taken out with your information, then your FICO score will be lowered because your debt to income ratio will be off.   If identity thieves have opened accounts in your name, the record of debt attached to your data, creates an onus for you to show it was not your transaction. Identity theft can prevent you from qualifying for a mortgage and it can come up even if you are already under contract, because mortgage lenders will run a second credit check between the application and the closing.

Chances are home buyers and sellers were affected because these are the class of consumers who would have been creating credit and checking it.  Equifax’s ability to sell Property Analytics ought to alert the public of the depth of Equifax’s information on consumer’s finances and property values.

Credit file freezes and credit monitoring services are discussed in all the articles, with credit freezes being the best method of protection available now.  The service sold by LifeLock would be especially relevant now, except for the fact that LifeLock has a 4 year contract with Equifax which leaves LifeLock customers wondering according to this Realty Times article.

This Upnest article suggests that the breach means that real estate transactions are more urgent now, buy or sell before your credit is compromised. This article is scary because it suggests that fraud on your account is a when, not if, scenario.  Another conclusion drawn is that with credit destruction a widespread phenomena, the litmus test that landlords use to evaluate tenants will become harder to rely on, because a score would not reflect the tenant but the history of how recently their credit was hit by the breach.

The article notes that there is now added pressure for mortgage lenders to detect fraudulent applications. If you are interested in what measures large corporations are looking into check out the Forbes article.

Whether the real estate industry sees a short term sprint to finish transactions before negative consequences arise from the breach, or longer term frustrations with credit scores a less meaningful way to measure the credit worthiness of renters and would be buyers, remains to be seen. If you want to play a role in the future of the Western Slope, act now if you are ready to own one of these fine properties offered by Cheryl&Co.  If you are not ready, keep your eye on the ball of your whole credit report to ensure the legitimacy of everything on it.