Scenario: Applicant applies for a loan with a loan officer verbally. Gives all relevant data. At the end of the discussion, applicant discloses that he/she has a recent bankruptcy. Loan officer tells the applicant that we cannot do this loan because we do not lend on recent bankruptcies.

Question 1: Should an AAN be sent?

Question 2: What if the first question from the applicant, before any relevant data had been given, was Do you accept bankruptcies? What then? AAN?

1. Yes, absolutely.

2. A little harder. The LO can tell the applicant what your policy is. For example, "We generally do not make loans if the applicant has declared bankruptcy in the last 2 years." If they apply the policy to the applicant's situation, then they cross the line and AAN is required.

My feelings exactly. Thank you GreatBlue, that was just what I wanted to hear!