You will find no "formal" definition that I'm aware of, however, from 202.2
Last edited by Dan Persfull; 03/16/09 04:55 PM.
(c) Adverse action.
(1) The term means:
(i) A refusal to grant credit in substantially the amount or on substantially the terms requested in an application unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered;
Simply telling an applicant you will reconsider the application if they provide a co-signer is not a counter-offer. You have made no "counter-offer" to grant credit. You have only placed an underwriting condition on the loan request that must be met before you will grant credit, therefore you have denied it as applied for.
The opinions expressed are mine and they are not to be taken as legal advice.