We have aps where we send out the GFE, but the applicant does not respond with payment of the vendor fee. We have given the applicant 10 days to provide their intent to proceed. What action taken & action taken date do we use for HMDA? It isn't a withdrawn application since the borrower didn't expressly withdraw. We have thought about sending out a notice of incomplete ap to see if we can turn any of these around. Help!

It's never really an app for HMDA purposes it sounds like as you haven't processed it since they haven't expressed intent that they even want a loan with your company.

However, if you render a decision based on a credit report you have pulled, you would owe them an AAN...but to me, it's not an app for HMDA purposes at this point.

I can follow your logic but no where does HMDA cite the applicant has to give an intent to proceed for it to be an application subject to reporting.

IMO it's an incomplete application for HMDA reporting purposes. The choices are to send an AAN denying it for an incomplete application or as said in hopes of prodding them to respond send a notice of incompleteness with a date by which they must respond.

If AAN - denial

If notice for incompleteness and they don't respond - closed for incompleteness

I'm still skeptical depending on the circumstances. If I receive an "application" for RESPA purposes, I may not have an application for other purposes. The GFE is for shopping. Dude shops 10 FI's...I never hear back...but all I ever had was enough info to deliver a GFE...I don't believe for a minute everyone is reporting these or sending incompletes.

There is no way I would think about sending an AAN. The customer would be shocked since they are just shopping around. I can't see it being a complete ap for HMDA purposes. This is so early in the process that we have to send disclosures for RESPA purposes but it doesn't seem to meet the definition of a complete ap for HMDA purposes.

Why couldn't the regulators at least coordinated with HMDA on the definition of application for the RESPA changes?

You cannot apply RESPA's definition of an app to that of Reg C's.

Reg C:

(b) Application. (1) In general. Application means an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with procedures used by a financial institution for the type of credit requested.

Do you take apps my mail, what if a person mails you an app but never follows up on it, do you accept on-line apps, what if they submit one on-line but never follow up on it, etc.......


And if you are not considering these applications for HMDA purposes or Reg B purposes then I sure hope you are not collecting GMI because you have no regulatory justification to do so.

I don't argue your logic, I just don't believe you have regulatory relief not to consider these applications for HMDA purposes.

This is why the regulators need uniform definitions across the regulations.

The only exception I would make to this thinking is if it is a purchase transaction and there is no identified property. Then I would concede to a pre-qualification request which is not reportable.

I just don't see how you can say you don't have an application for a credit request simply because the applicant decided not to proceed with the request. RESPA even considers it an application request because you have to issue the GFE, you just can't collect any fees until the applicant decides they want to proceed with the request.

The intent is to say yes or no to proceeding with the application request. It is not a yes or no as to whether you have an application.

If the applicant informs you they don't want to proceed then I would say you have a withdrawal either due the fees shown on the GFE or for some other reason. If they don't respond then I stand my above answer.

You are correct. I think we will use a letter to prode some of these applicants along but we also have to report these for HMDA purposes unless the ap was purchase transaction without a property. Thanks for all your help.

Not that Dan needs it, but I agree with him.

I reviewed a process recently that combined the "here is your GFE and we must hear from you by x date with the notice of incomplete application letter (we need x data by x date to move forward or we will close your file for incompleteness letter). It gave plenty of time and met all regulatory requirements for Reg B and RESPA, and made it clear how to report for HMDA.

^^^That's what we worked out with our FRB regulators years back. We tickle the file to follow up after two weeks with a letter that says pretty much what Kaybee outlined above.