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#1133488 - 02/20/09 07:47 PM HMDA Question
southerngirl09 Offline
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I have a HMDA reportable loan. The bank has a lien on the customer's grandmothers property. The proceeds of the first loan was to purchase the grandson's property with the lien on the grandmothers property (we do not have a lien on the grandsons property). We refinanced the loan. What would the owner occupancy be??? I would report the address of the grandmothers property since we have a lien on that correct? Also do I report the rate spread on this loan?

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#1133541 - 02/20/09 08:34 PM Re: HMDA Question southerngirl09
Dan Persfull Online
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Occupancy - owner occupied. You report the occupancy status of the property being reported on the LAR.

Address - grandmother's property secures the loan. For home purchases and refinancing you report the property securing the loan.
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#1134563 - 02/24/09 03:16 AM Re: HMDA Question Dan Persfull
GordonB Offline
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Dan: HMDA-reportable Home Equity loan Refinance purpose. Applicant receives a Day 1 Conditional Approval based on a paper-submitted or on-line application, and is mailed a Request for Additional Information Notice advising that Income Verification is required in order to approve the loan, giving the borrower XX (Reg B compliant) # of days) to return this information required to approve the loan.

Questions:
a) if we do not hear back from the borrower by the deadline given on the Notification, HMDA reporting = File Closed for Incompleteness, correct?

b) if the borrower instead advises the local branch that they've either "found a lower rate elsewhere" or "changed their mind" or "obtained a higher amount based on estimated LTV elsewhere" or for ANY other reason (ie...prior to any Credit Decision beyond the Day 1 "conditional"), HMDA reporting = Withdrawn, correct?

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#1134633 - 02/24/09 01:58 PM Re: HMDA Question GordonB
Dan Persfull Online
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A. Correct.

B. It would be a denial for an incomplete application. Verification of income is a credit worthiness condition.

See Conditional Approvals under Action Taken.

http://www.ffiec.gov/hmda/faqreg.htm



(ie...prior to any Credit Decision beyond the Day 1 "conditional"),

I overlooked this comment. If the applicant withdraws before you made your credit decision (whether a final or conditional decision) then it would be a withdrawn request.

Last edited by Dan Persfull; 02/24/09 02:02 PM. Reason: To add an additional comment.
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#1139118 - 03/03/09 07:36 PM Re: HMDA Question Dan Persfull
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Dan: Just to re-clarify on the above example, relative to your final comment re: "overlooked the comment" and ensure that I'm interpreting your answer properly... do you agree that if the applicant in the above situation (# B) proactively advises bank of desire to terminate the application process (better rate elsewhere, just changed mind, etc...) AFTER the initial Day 1 Conditional Approval but PRIOR TO ANY subsequent credit decision, the HMDA coding would be "withdrawn" (vs Closed for Incompleteness)?

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#1139138 - 03/03/09 07:49 PM Re: HMDA Question GordonB
Dan Persfull Online
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Quote:
AFTER the initial Day 1 Conditional Approval but PRIOR TO ANY subsequent credit decision, the HMDA coding would be "withdrawn" (vs Closed for Incompleteness)?


If you gave them a conditional approval before they withdrew then you need to follow the guidelines for conditional approvals given in the FAQs.
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#1139425 - 03/04/09 06:48 AM Re: HMDA Question Dan Persfull
GordonB Offline
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Dan: I apologize, I've lost context with the re-clarified progression. Could we please try this again?

HMDA-reportable Home Equity loan Refinance purpose. Applicant receives a Day 1 Conditional Approval based on a paper-submitted or on-line application, and is mailed a Request for Additional Information Notice advising that Income Verification is required in order to approve the loan, giving the borrower XX (Reg B compliant) # of days) to return this information required to approve the loan.

Questions:
a) if we do not hear back from the borrower by the deadline given on the Notification, HMDA reporting = File Closed for Incompleteness, correct? WE AGREE YES is answer here.

b) if the borrower instead advises the local branch that they've either "found a lower rate elsewhere" or "changed their mind" or "obtained a higher amount based on estimated LTV elsewhere" or for ANY other reason (ie...prior to any Credit Decision beyond the Day 1 "conditional"), HMDA reporting = Withdrawn, correct?

Thanks in advance for your thoughts on these 2 (particularly the 2nd one).

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#1139476 - 03/04/09 01:38 PM Re: HMDA Question GordonB
Dan Persfull Online
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Conditional approvals---failure to satisfy creditworthiness conditions. How should a lender code "action taken" where the borrower does not satisfy conditions concerning creditworthiness?

Answer: If a credit decision has not been made and the borrower has expressly withdrawn, use the code for "application withdrawn." That code is not otherwise available. See Appendix A, I.B.1.d. If the condition involves submitting additional information about creditworthiness the lender needs to make a credit decision and the applicant has not responded to a request for the additional information in the time allowed, use the code for "file closed for incompleteness." See Appendix A, I.B.1.e. If the borrower has supplied the information the lender requires for a credit decision and the lender denies the application or extends a counter-offer that the borrower does not accept, use the code for "application denied." If the borrower has satisfied the underwriting conditions of the lender and the lender agrees to extend credit but the loan is not consummated, then use the code for "application approved but not accepted."

For example, if approval is conditioned on a satisfactory appraisal and, despite notice of the need for an appraisal, the applicant declines to obtain an appraisal or does not respond to the lender's notice, then the application should be coded "file closed for incompleteness." If, on the other hand, the applicant obtains an appraisal but the appraisal does not support the assumed loan-to-value ratio and the lender is therefore not willing to extend the loan amount sought, then the lender must use the code for "application denied."
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#1140268 - 03/05/09 10:25 AM Re: HMDA Question Dan Persfull
GordonB Offline
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Dan: Thanks, this is helpful. One final clarification to your final paragraph above: "if approval is conditioned on a satisfactory appraisal (noticed to applicant) and applicant declines an appraisal or does not respond, app will end up in "file closed for incompleteness". Final question = same exact situation, same exact point in time, however, client advises local branch that they wish to withdraw the application because they either "found a lower rate at a competitor", received a conditional approval elsewhere with a higher LTV product", "just changed their mind" or ANY other reason prior to a credit decision (beyond the original "Day 1 conditional") ... the HMDA reporting would be "withdrawn", correct?

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#1140269 - 03/05/09 11:03 AM Re: HMDA Question GordonB
Kathleen O. Blanchard Offline

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Not Dan, but yes, if the client changed their mind prior to a credit decision, the correct HMDA code is withdrawn.
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#1345459 - 02/18/10 06:06 PM Re: HMDA Question Kathleen O. Blanchard
KTMiteComply Offline
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only if I want to....
Scenerio #1 - We have been told that when we pull Findings that this is considered a "credit decision". If these U/W Findings are Approve/Eligible and the customer decides not to continue with the loan, then it would be Approved Not Accepted....correct?

Scenerio #2- Loan Officers sends out a Notice stating, we need Sales Contract or Income Verification in order to process your loan and we don't hear back from you in x amount of days, your file will be closed for incompleteness...never hear back from customer...file closed Incomplete...correct?

What if these 2 Scenerio's happen in the same file...which one supersedes? The Incomplete?
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#1345512 - 02/18/10 06:40 PM Re: HMDA Question KTMiteComply
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Scenario 1 - Really? Pulling the findings is not underwriting and commiting to a loan so how can it be making a credit decision? My Fed examiners would disagree with whoever told you this. (Tell me if's Feds from another region. I need a good laugh )

Scenario 2 - yes, incomplete

As to your last, how could you possibly make a credit decision on an incomplete file? See what I mean back in #1 now?

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#1345520 - 02/18/10 06:44 PM Re: HMDA Question Truffle Royale
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Agree with Truffle that you have a conflict here....if a file does not have the information needed to make a credit decision, how could it possibly be approved not accepted?
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#1345608 - 02/18/10 07:58 PM Re: HMDA Question Kathleen O. Blanchard
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only if I want to....
Welllll...it's like this...YES, our Bank Examiners, back in 2006 (I think it was about that time) was INSISTENT and I mean VERY insistent that these DU Findings were our "intent to approve", therefore should be considered Credit Decisions...which we did not necessarily agree with, but hey how do you argue with your examiners who are not so nicely telling you this. Actually we had to change MANY files from "withdrawn" to "approved not accepted". I can tell you this has caused me many a headache over the last several years. I've asked this question repeatedly at training seminars with no clear answer.

So what do you guys "deem" Approved Not Accepted? If it has gone to your Loan Committee and been Approved and it wasn't accepted...just wondering?
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#1346471 - 02/19/10 08:46 PM Re: HMDA Question KTMiteComply
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Curled up by the fire...
These are the notes I have on ANA:
Application approved but not accepted or when the applicant or lthe loan broker or correspondent fails to respond to a notification of approval or commitment letter within the specified time.
Example: Approved pending counteroffer - if the applicant does not respond or declines to accept the counter offer.
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#1346478 - 02/19/10 08:51 PM Re: HMDA Question Mrs. Rizzo
Dan Persfull Online
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Quote:
Example: Approved pending counteroffer - if the applicant does not respond or declines to accept the counter offer.


A counter offer that was not accepted or responded to would be a denial, not an approved but not accepted.
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#1346500 - 02/19/10 09:02 PM Re: HMDA Question Dan Persfull
Mrs. Rizzo Offline
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Curled up by the fire...
Originally Posted By: Dan Persfull
Quote:
Example: Approved pending counteroffer - if the applicant does not respond or declines to accept the counter offer.


A counter offer that was not accepted or responded to would be a denial, not an approved but not accepted.


eek I was typing from the wrong line!!! LOL!

If the borrower has satisfied the underwriting conditions of the lender and the lender agrees to extend credit but the loan is not consummated, you would use ANA. (From FFIEC FAQ)
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#1346514 - 02/19/10 09:13 PM Re: HMDA Question Dan Persfull
Carolina Blue Offline
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Lost in a regulatory fog
Just want to agree with the inconsistency. Prior to me coming to the bank, the bank had a third party consultant convince the bank to change all the automated "approved/eligible" and "streamlined accept" loans to approved, not accepted if the loan was did not close. Now the regulators are making us go back and change them all to withdrawn, which I don't agree with since some did not expressly withdraw the application and some did not meet the conditional underwriting requirements associated with the automated underwwriting. I give up in trying to find the logic in anything which the government is involved.

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#1346533 - 02/19/10 09:24 PM Re: HMDA Question KTMiteComply
Island Dreaming Offline
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Originally Posted By: KTMiteComply
Scenerio #1 - We have been told that when we pull Findings that this is considered a "credit decision". If these U/W Findings are Approve/Eligible and the customer decides not to continue with the loan, then it would be Approved Not Accepted....correct?


We had OCC examiners insist this was correct as recently as last year!!
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#1346659 - 02/19/10 11:54 PM Re: HMDA Question Island Dreaming
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Looking for My Happy Place....
So, if a customer is "approved" but after multiple solicitation calls they decide to "withdraw" the application it is an ANA and not a withdrawal?

I had read in the GIR that an ANA was one where the customer never responded to the approval.

Just had one of these and want to be sure....thanks!
Last edited by Tigg; 02/19/10 11:54 PM.
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#1346664 - 02/20/10 12:12 AM Re: HMDA Question Tigg
Kathleen O. Blanchard Offline

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Originally Posted By: Tigg
So, if a customer is "approved" but after multiple solicitation calls they decide to "withdraw" the application it is an ANA and not a withdrawal?

I had read in the GIR that an ANA was one where the customer never responded to the approval.

Just had one of these and want to be sure....thanks!

Yes, if the application was approved and the customer never comes back to move forward to closing or specifically withdraws their application/advises bank they do not wish to go forward, it is reported as approved not accepted.

A loan can only be reported as withdrawn if the bank has not yet made a credit decision.
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#1348934 - 02/25/10 01:55 PM Re: HMDA Question Kathleen O. Blanchard
Carolina Blue Offline
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Lost in a regulatory fog
If they are fully approved through underwriting then I agree, but if we are talking about just an "Approved/Eligible" from automated software, then I think that's a conditional approval, which means it could be withdrawn, denied or approved/not accepted depending on what the applicant does.

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