Undisclosed debt is an industry problem, and it can result in losses if unchecked.
Consider that 36% of borrowers who opened only one new trade line during the loan quiet period had an increased DTI ratio of 3% or more. This can result in:
- Expensive loan repurchase demands
- Negative impact on Government-Sponsored Enterprise scorecard
- Regulatory action due to noncompliance with ability-to-repay based on 43% DTI ratio