PRESS RELEASE
Posted on: June 11, 2007

Contact:
Jodi Greenblatt
(703) 342-5842

NAMB Opposes Practice of Artificially Inflating Credit Scores
"Piggybacking" Obscures a Borrower's True Credit Risk

Washington, DC - June 8, 2007 - The National Association of Mortgage Brokers (NAMB) today announced that it opposes the practice of increasing low credit scores by purchasing access to the good credit history of a willing stranger. The practice, often referred to as "piggybacking", can negatively affect financial markets because borrowers will be approved based on fraudulent credit scores and information that does not accurately portray their credit history.

"We believe that renting the credit history of an unknown or unrelated individual in order to obtain a loan with a lower interest rate is an unethical practice," said NAMB President Harry Dinham. "NAMB believes this fraudulent practice should be prohibited."

An example of this practice involves a person with low credit paying a fee to be added temporary as an authorized user of an account, such as a credit card, belonging to a person with excellent credit. Once added, the newly-authorized user shares the credit history of the unrelated individual, which artificially increases the authorized user's credit score in a short amount of time. By inflating their credit score, a person may be able to obtain a mortgage loan with a lower interest rate that, otherwise, they could not obtain using their true credit rating.

"We oppose the for-profit practice of adding an unrelated person as an authorized user on a line of credit because it inflates credit ratings in an inappropriate manner," said Dinham. "This practice defeats the very purpose of credit scores."

NAMB encourages the Federal Reserve Board, Federal Trade Commission, Government Sponsored Enterprises and state regulators to take action to prohibit this fraudulent and deceptive practice.

In addition, NAMB supports efforts to help consumers better understand how to protect and improve their credit scores legitimately.

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The National Association of Mortgage Brokers is the voice of the mortgage broker industry with more than 25,000 members in all 50 states and the District of Columbia. NAMB provides education, certification and government affairs representation for the mortgage broker industry, which originates over 50% of all residential loans in the United States.

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