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#1461132 - 10/28/10 09:54 PM Rate Quote-Adverse Action?
Anonymous
Unregistered

This is probably a dumb question, but I am asking anyway.

If you pull credit to provide a rate quote and you never hear from that customer again, how would this be treated for Adverse Action?

We only have enough information to pull credit...a property is not identified. Please help

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#1461169 - 10/29/10 01:32 AM Re: Rate Quote-Adverse Action? Anonymous
jlroberts Offline
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jlroberts
Joined: Sep 2009
Posts: 1,579
Ohio
I think you'd only have to if you were going to decline the loan based on the information on the credit report.
We don't have a pre-approval program but the we will provide an "opinion letter" if a borrower is looking for a home and are trying to figure out how much they can borrow. If we take one look at the credit report and say no-way, we give the AA.

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#1461358 - 10/29/10 03:16 PM Re: Rate Quote-Adverse Action? Anonymous
NotALawyer Offline
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NotALawyer
Joined: Nov 2001
Posts: 455
Assuming the applicant is not being denied due to the information in the credit report, one of two things is required:
1 - A notice of incompleteness.
2 - An adverse action notice with the decline reason being that the application is incomplete.

Edited to add:
These notices are required only if you have enough contact information about the applicant to be able to mail the notice.
Last edited by NotALawyer; 10/29/10 03:17 PM.
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#1461365 - 10/29/10 03:20 PM Re: Rate Quote-Adverse Action? Anonymous
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,855
Bloomington, IN
Originally Posted By: Anonymous
This is probably a dumb question, but I am asking anyway.

If you pull credit to provide a rate quote and you never hear from that customer again, how would this be treated for Adverse Action?

We only have enough information to pull credit...a property is not identified. Please help


Sounds to me like you had an inquiry. If no adverse action was taken there are no notification requirements.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1461715 - 10/29/10 11:26 PM Re: Rate Quote-Adverse Action? Dan Persfull
Anonymous
Unregistered

Thanks so much for your comments, but just to make sure I understand; is an inquiry the same as a prequal?

This is the scenario, customer calls and wants to know if they are likely to qualify for a home loan and what would the rate be. We tell them that we must pull a credit report to provide a rate (based on score). We do not have a "preapproval" program and do not provide a written committment. When we provide the information, the customer says thank you and hangs up. I could be wrong, but this appears to be an inquiry and doesn't require an incomplete application notice, because the customer did not apply. Am I right? Also, I beleive this is not HMDA reportable either.

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#1461720 - 10/30/10 12:43 AM Re: Rate Quote-Adverse Action? Anonymous
jlroberts Offline
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jlroberts
Joined: Sep 2009
Posts: 1,579
Ohio
That's the way we see it.
We quote rates without pulling a credit report. We state that is our best rate assuming excellent credit, property value, etc.

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#1461740 - 10/30/10 02:09 PM Re: Rate Quote-Adverse Action? jlroberts
Rocky P Online
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Joined: Jun 2003
Posts: 7,426
Florida
From ECOA - OSC
3. When an inquiry or prequalification request becomes an application. A creditor is encouraged to provide consumers with information about loan terms. However, if in giving information to the consumer the creditor also evaluates information about the consumer, decides to decline the request, and communicates this to the consumer, the creditor has treated the inquiry or prequalification request as an application and must then comply with the notification requirements under 202.9. Whether the inquiry or prequalification request becomes an application depends on how the creditor responds to the consumer, not on what the consumer says or asks.
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#1461941 - 11/01/10 04:14 PM Re: Rate Quote-Adverse Action? Rocky P
Still Smiling Offline
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Joined: Nov 2007
Posts: 767
Are you saying that the inquiry becomes an application when you evaluate a credit report? Our bank pulls credit to quote rates, but if the customer doesn't want to apply, we have not been providing any additional disclosure such as a notice of incompletness. Is this wrong?
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#1461965 - 11/01/10 04:38 PM Re: Rate Quote-Adverse Action? Still Smiling
hmdagal Offline
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hmdagal
Joined: Dec 2002
Posts: 3,818
This is not my area of expertise at all, but what do you do if their credit doesn't qualify for a loan?

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#1461978 - 11/01/10 04:47 PM Re: Rate Quote-Adverse Action? hmdagal
Still Smiling Offline
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Joined: Nov 2007
Posts: 767
If we know immediately that they will not qualify based on credit, we send an adverse action notice. I guess my concern is what are you obligations if you tell them that based upon their credit score they would likely qualify for xx rate, etc, but you never hear back from that customer.
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#1461982 - 11/01/10 04:50 PM Re: Rate Quote-Adverse Action? Still Smiling
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,855
Bloomington, IN
In that case you have no further notification requirements under 202.9.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1462736 - 11/02/10 07:53 PM Re: Rate Quote-Adverse Action? Dan Persfull
Still Smiling Offline
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Joined: Nov 2007
Posts: 767
Thanks everyone.
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Comments are strictly my own and not that of my employer.

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