Debt Free

According to a Washington Post report today, people are being denied mortgages and car loans when lenders check their names against the Department of Homeland Security's terror watch list of people with suspected ties to terrorists. The Office of Foreign Asset Control (OFAC), the same office tasked with cutting off and tracking assets used by terrorist organizations (a fantastic idea, by the way), has provided the list to banks and other financial organizations in the days following the September 11^th, 2001 World Trade Center attacks.

The problems have arisen when the loan applicant's names have similarities to names on the list. Due to the extreme penalties levied by the federal government against companies for conducting business with those on the list (another great idea), some businesses have taken a “better safe than sorry” approach if a name pops up, even if it's not an exact match. In some cases, such as the one cited in the Post story, lenders get cold feet even when it can be easily proved that the person on the list isn't the same as the loan applicant. That's a case of the “better safe than sorry”strategy being taken too far, and business should apply some common sense to their selection process.

If that happens to you, you'll be denied the loan for no apparent reason, as the businesses in question are loathe to reveal the reason for your denial. If this occurs, check your credit report (you pulled one before you applied, didn't you?). Chances are there'll be a red flag, in the form of an OFAC alert, on there. You can try to contact the lending institution to clear things up, or just take your business elsewhere.