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#686994 - 02/14/07 07:19 PM Prequalifications
stormie Offline
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Joined: Nov 2004
Posts: 102
I am wondering how much information you can actual request from consumer for prequalification purposes without having this information considered application in a regulators eyes.

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Lending Compliance
#687006 - 02/14/07 07:30 PM Re: Prequalifications stormie
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
As much information as you wish. You can run a prequalification request through the complete underwriting process and still not have an application for HMDA reporting purposes, providing you don't have a qualified pre-approval program; and as long as you do not have an identified property you don't have an application for RESPA purposes. Or you can simply tell the person no because you don't like the way they look and then you have an application for Reg B purposes under 202.9.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#807099 - 08/31/07 03:46 PM Re: Prequalifications Dan Persfull
Lissa P. Offline
Gold Star
Joined: Oct 2003
Posts: 474
Texas, USA
Okay, Dan I have another question to add to this old thread. We are wanting to use a very simple Pre-qual worksheet that the applicant would complete with very basic financial information. As long as we have enough information to evaluate credit are we covered? I thought since Reg B applies to prequals, we need to include the Type of Credit Request. We are a HMDA reporter, but since prequals are not reportable, I'm assuming we don't need to collect monitoring information. Any thoughts?

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#807133 - 08/31/07 04:00 PM Re: Prequalifications Lissa P.
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
I'm not sure what you are asking when you say as long as we have enough information to evaluate credit are we covered.

Reg B does not treat pre-qualifications as applications for credit. See the Commentary to 202.2(f). However, if you take adverse action on the pre-qualification request then the request becomes an application for credit for the purposes of the notification requirements of 202.9.

If you do not have an application for credit then it is now my opinion you do not need to collect GMI on pre-qualifications.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#807307 - 08/31/07 05:25 PM Re: Prequalifications Dan Persfull
Lissa P. Offline
Gold Star
Joined: Oct 2003
Posts: 474
Texas, USA
That's exactly what I was trying to determine. Thanks Dan!

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