A credit report shows 6 inquiries in the last 90 days and the borrower says none of them produced new debt. What follow-up best addresses the possibility of undisclosed debt associated with these recent inquiries?
Correct Answer
B) Obtain a written explanation and confirm no hidden debt exists
B. Document the explanation and verify whether additional obligations exist. An inquiry shows that credit was sought, not necessarily that money was borrowed. Follow-up distinguishes rate shopping or unsuccessful applications from newly opened accounts. If additional debt exists, verify its payment and include it in qualification as required. Scope and exceptions: Fannie Mae supplies an underwriting example supporting confirmation of additional credit. The cited section does not prescribe a universal written-letter requirement for every mortgage product. Source: B3-5.3-04, Inquiries: Recent Attempts to Obtain New Credit — https://selling-guide.fanniemae.com/sel/b3-5.3-04/inquiries-recent-attempts-obtain-new-credit
Why This Is the Correct Answer
B. Document the explanation and verify whether additional obligations exist. An inquiry shows that credit was sought, not necessarily that money was borrowed. Follow-up distinguishes rate shopping or unsuccessful applications from newly opened accounts. If additional debt exists, verify its payment and include it in qualification as required. Scope and exceptions: Fannie Mae supplies an underwriting example supporting confirmation of additional credit. The cited section does not prescribe a universal written-letter requirement for every mortgage product.
Why the Other Options Are Wrong
Option A: Accept the statement, since inquiries alone create no obligation
The observation about inquiries is true, but accepting it without follow-up leaves the debt question unresolved.
Option C: Require the borrower to wait 90 days for the inquiries to age off
Waiting does not establish what happened after the inquiries; 90 days is not a universal inquiry-expiration rule.
Option D: Decline the file, because 6 inquiries in 90 days signal fraud
The number of inquiries alone does not prove fraud or require automatic rejection.
Exam Tip
Investigate the obligation behind an inquiry, not merely the inquiry count.
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