FAQs About Loan Quality Debt Monitoring

To obtain additional information visit the Loan Quality Debt Monitoring product page.

LQDM is an alert-based solution designed to scan your borrower’s credit profile during the "quiet period" between initial credit pull and closing. It helps ensure compliance with Fannie Mae’s Loan Quality Initiative (LQI) by alerting you to credit changes—such as new debt or inquiries—that may impact borrower eligibility, allowing you to address issues early and avoid closing delays or loan fallout.

Depending on the credit bureau ordered, it can take up to 24–48 hours to start or stop monitoring. Alerts will begin once the bureau acknowledges that monitoring has started. They will end once the bureau confirms monitoring has ended.

Loan Quality Debt Monitoring (LQDM) continuously scans a borrower’s credit profile for changes that may impact a lending decision. In addition to monitoring new inquiries and newly opened or undisclosed trade lines, LQDM can be configured to track additional credit attributes such as balance increases, payment changes, and other activity that occurs during the quiet period. Because the solution is configurable, alerts are generated only when a change meets your defined criteria—helping you quickly identify and address potential risks to the loan’s closing or salability.

At the time a debt monitoring order is placed, you have the ability to select a “look-back” or “start date” up to 118 days in the past. This allows you to capture any credit activity during the quiet period of the loan process while reducing overall fallout by ordering monitoring later in the loan process.

You will receive daily updates regarding any changes to a borrower’s credit profile. This allows you to identify risks quickly and communicate with your borrowers more effectively during loan fulfillment.

You have the flexibility to choose the solution that best suits your business, as monitoring is available from all three major credit bureaus: Equifax, Experian, and TransUnion.

The main differences between each credit bureau’s debt monitoring product would be price, inquiry suppression, locked or frozen file policy, and length of the total monitoring period.

Each credit bureau has a different policy when it comes to suppressing self-generated inquiry alerts. Experian will only suppress self-generated alerts on a “go forward” basis. They will not suppress any alerts during the look-back period. Equifax will mask all alerts, but we need to provide the subcode from which credit is being pulled. The lender needs to obtain a client-specific sub-code from their credit vendor and provide that to us at the time of onboarding. TransUnion will not suppress any alerts.

An initial Debt Monitoring Report PDF confirming that monitoring has begun—along with the monitoring fee—will appear in your file once the credit bureau(s) accept the order. This typically occurs within 1–2 business days after the LQDM order is submitted to Cotality™.

For each subsequent alert, an updated PDF is uploaded showing all alerts to date. Additionally, a final PDF summarizing the monitoring details and any alerts received during the monitoring period will be added to the report within 24–48 hours after the request to unsubscribe.

Yes. All three major credit bureaus (Equifax, Experian, and TransUnion) continue to monitor your profile even when it is locked or frozen.

Refer to the Loan Quality Debt Monitoring (LQDM) Error List below for additional detail(s).