When a loan is denied and/or withdrawn, should you only use code 3 on the HMDA LAR (Not secured by a lien.), even if the loan would have been secured by a lien had it originated?

IMO, you should report what the lien status would have been if the loan had closed. According to the HMDA rules, Codes 1-3 are used for loans that the institution originates as well as for applications that do not result in origination. For withdrawn/denied/approved but not accepted applications we have been using what we believe the lien status would have been had it been originated.

We've also been using the 'proposed' lien status for applications that are not originated.