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#1404578 - 06/16/10 07:19 PM Adding borrower to application
zums Offline
Member
Joined: Jan 2010
Posts: 65
In May, had a customer apply to get pre-approved or pre-qualified for a home purchase. At the time he provided all of his financial information (W-2s, paystubs, personal financial statement, etc.), we pulled credit and approved him to shop for a qualifying property up to a certain limit.

Today, I received a signed and accepted purchase contract that lists both he and his wife as the buyers and their intent is for them both to be on the loan. I'm confused on how to handle this situation:

- Do I need a brand new joint application for both of them with new financial information?
- If so, do I pull a new joint credit report or just an individual on her?
- What do I do with the old application/credit report if thats the case?
- Do I just collect her information, either on a new app or adding to the old app and then pull an individual credit report on her?

I'm just not sure what issues I need to be looking out for in this situation. He is very well qualified and a commercial borrower of ours, so credit is good and her income isnt needed to qualify their payments.

Thanks in advance for any direction!!

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Lending Compliance
#1404684 - 06/16/10 10:12 PM Re: Adding borrower to application zums
BTJ Offline
Member
Joined: Sep 2007
Posts: 83
If action has not already been taken on that May loan, the best solution would be to consider that May application as "withdrawn (ECOA)/ approved/not accepted (HMDA)" or "preapproval not accepted" for disposition / notification purposes (depending on whether your institution has a covered preapproval approval program)

I'd recommend staring with a new application - primarily because of the property identification requirements contained within RESPA and TILA effective in January 1, 2010.

If this was prior to January 1 2010 and previous action had not been taken (ECOA notification), there really would be nothing wrong with adding borrowers to a transaction - upon borrower request like you described.

If you elect to continue with the existing application for whatever reasons, and the loan is not being sold in the secondary market, you can also elect to utilize the OLD RESPA rules - just stay consistent with OLD GFE and OLD HUD1 w/o using the NEW GFE or NEW HUD.

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#1404779 - 06/17/10 01:04 PM Re: Adding borrower to application BTJ
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,765
Bloomington, IN
- Do I need a brand new joint application for both of them with new financial information?

This would be up to your policy and procedures. As BTJ stated you can start a new applicaiton or in our case we would amend the existing application.

- If so, do I pull a new joint credit report or just an individual on her?

We would pull a new joint report.

- What do I do with the old application/credit report if thats the case?

You would maintain them with documentation of what transpired.

- Do I just collect her information, either on a new app or adding to the old app and then pull an individual credit report on her?

See #1.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1404996 - 06/17/10 04:07 PM Re: Adding borrower to application Dan Persfull
zums Offline
Member
Joined: Jan 2010
Posts: 65
Going to start over with a new application (just transfer his info over and collect hers), pull a new joint credit, etc. and document the original individual pre-approval application with address TBD to have been withdrawn.

Thank you very much for your responses.

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