We have had internal discussions onour process that lead to the following question:

Can we underwrite an application prior to receipt of the applicants notice of intent to proceed? We understand we cannot charge fees above the cost of a credit report prior to receipt of the notice to proceed.

My thought is that we can do internal processes like underwrite but cannot require documentation nor fees until they have the GFE and given us intent.
Your feedback is appreciated.

Additional clarification for a RESPA eligible loan:

Upon receipt of an application, our Compliance Desk generates the GFE/TIL initial disclosure package. The disclosures mailed and submitted to underwriting.

If a loan application is preliminarily underwritten shortly after receipt (prior to receipt of the notice of intent to proceed), can we issue a approval letter with conditions that require specific documentation (like tax returns) prior to having received the notice of intent to proceed? No fees will have been collected prior to receipt of the notice of intent.

Thanks

Too your first question, the answer is yes, many banks will underwrite the loan based solely on the original information provided and if the applicant does not qualify, they will deny the loan, send an adverse action notice and eliminate the need to send any preliminary disclosures.

To your second question, I would say probably not. By sending an approval letter prior to the applicant giving you the intent to proceed, it may be perceived as a UDAP by falsely leading the customer to believe they may now have to proceed with the transaction.