We have a lender that did a memo for a withdrawn application however he put on the memo"customer could not get judgements cleared so we were not able to close the loan and the loan officer withdrew the application". Apparantly the lender worked with the customer for a while to get these taken care of but was going on too long and hit too many roadblocks. My question is, can a lender withdraw an application instead of the customer?

Nope, only the applicant can withdraw their application.

This is a denial, you owe the applicant an AAN.