Mortgage lenders and insurance companies are increasingly using credit-scoring models to determine whether to lend or offer homeowners' insurance to prospective homebuyers. Credit scores have become crucial, not only to a consumer's ability to secure a decent mortgage, but also to a consumer's ability to obtain homeowners' insurance, without which he or she cannot obtain mortgage financing.

The National Association of Realtors recently convened an Insurance Task Force to examine the availability and affordability of homeowners' insurance in response to complaints from Realtors that the lack of homeowners' insurance has become an obstacle to homeownership.

In a letter delivered earlier this week to both houses of Congress, the association's president, Cathy Whatley, explained that "consumers are experiencing delayed or cancelled home settlements due to the unavailability of affordable insurance." In fact, a recent study conducted by the Independent Insurance Agents and Brokers Association of America found that nearly 2.5 million consumers lost their homeowners' insurance over the last 24 months.

The National Association of Realtors Insurance Task Force found that the increasing use of scoring models by insurers and others has created unintended consequences for consumers. "Because consumer databases have grown and their uses have widened, accurate consumer information is essential to both consumers and businesses," said Whatley. "It has been long standing policy at (the association) to promote transparency in the mortgage and home-buying process."

Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.silvar.org. Send questions on any topic to jnewton@jnpr.com.