For Reg B purposes, what is a "completed application"? For example, if an application is received Aug 1, application is on the path to approval (credit pulled and reviewed) yet the final decision is pending receipt of real estate services and/or title insurance. Information is not received until Sept 15 and a decision is made. When did the 30 day clock start for sending notification? Thank you.

Reg B defines a "Completed Application" in §202.2(f):

"A completed application means an application in connection with which a creditor has received all the information that the creditor regularly obtains and considers in evaluating applications for the amount and type of credit requested (including, but not limited to, credit reports, any additional information requested from the applicant, and any approvals or reports by governmental agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral). The creditor shall exercise reasonable diligence in obtaining such information."

Title insurance is verification info. That's what you do AFTER you receive an application. Sounds to me like your 30 day clock started on 8/1.

You may be interested in a webinar I did on this exact topic called "Applicants and Applications":
http://www.bankersonline.com/bankerstore/index.php?main_page=product_info&products_id=1103

Thanks David. Would real estate services be considered verification information and follow the same logic as title insurance?

I'm not sure what "real estate services" means.

Sorry. Property report, flood report and/or appraisal.

Those are all verification documents. You don't order an appraisal until after you receive an application.

So the application is considered a "complete application" before any verification documents are received?

Exactly. You receive the application, then you verify the information.

An application is complete, and the clock starts ticking when the creditor has all the information necessary to make a credit decision, like David mentioned.

If for example, a credit bureau is the first thing ordered and comes back horrible, that is when you have a complete application - you have everything needed to make a (decline) decision.

If it comes back OK, then the lender next checks the employment references, and the reference comes back bad, then the bank has a completed application based on the employment references - and the 30 days starts then.

If all come back good, and the appraisal is next, . . . same scenario - if it's bad - stop and notify, if it's good keep going. Many of the processing steps are done simultaniously - not one after another.

This is my interpretation. You keep going - quoting David & the reg - "The creditor shall exercise reasonable diligence in obtaining such information."

I agree, but want to add one caveat. Its complete when you have the information from the applicant (unverified), not when you verify it all.

I don't think this is correct--the applicant gave you the information, that is the completed application date, not when you receive "references back". That is a verification.

EXACTLY!

Would this apply to income verification as well? Applicant provides the amount of income on the application which is received 10/1. Income verification is required. Verification of income is received from the applicant on 10/21. Would the 30 day clock start on 10/1 when the applicant provided the income? Thanks!

Yes. Verification of ANYTHING is what you do AFTER you receive the application. Your clock started on 10/1.

Let me say it another way: When the applicant tells you something (income, expenses, assets, etc.) you are to assume it is true (for now). When you have enough info to make a decision, the application is complete. THEN you prudently verify all of the information provided.

I understand when the clock starts to click, but if an appraisal is scheduled and not due back until after the 30 day clock expires, are we suppose to send an adverse action letter? Seems silly to do so if the end result would more in likely be an approval or do we just notate the file with reasons for the delay in decisioning the loan within 30 days?

No. If you tell the customer you are willing to make the loan ASSUMING verifications are OK, you have stopped your clock.

Verbal communication is acceptable (we don't need to advise the customer in writing), correct?

Yes - but like anything else, documentation is the key.