I have not heard of lenders relying solely on credit reports.  I think it's a bad idea, though.  While a merged report from all three major bureaus will show most of the debt, I doubt it would show any mechanics liens or loans from non-institutions.  Also, while the report will indicate that an account is mortgage related, the lender will not know which property is encumbered in the event the owner holds multiple properties (excepting the mortgage that the lender is foreclosing).