We have a situation where an applicant applies for a 30 year loan. We currently close the loans in the bank's name and then sell to investors within 30 days or so. The loan was rejected by the first investor so our LO completed a denial letter and then in turn recreated a new application and sold to another investor. GFE's were issued on both applications and rates were locked (the rate did change with the second investor. Should this initial loan application have been a changed circumstance, or was the new application appropriate?

Who does your underwriting, you or your investor?

Normally we complete the underwriting, however in this situation the investor completed the underwriting.

Then the investor reports the loan as a denial, not you.

If the second investor underwrote it too, they'll report it as an origination.

Remember, in the case of originations and denials, you only report loans that you actually make the underwriting decision on.

Of course, you report all applications that are withdrawn or incomplete and never make it to being underwritten too.

What did the investor base the rejection on? If the program didn't change, then I don't see a basis for a CC or a denial...the loan simply wasn't accepted by investor #1 (for whatever reason).

I know a lot of folks seem to just deny and start over, but I'm not sold on that idea...others may say otherwise.

pssst, joker, go back and reread ADN's response to my querry as to who did the underwriting. It wasn't a rejection. It was an outright denial on a loan that was being underwritten by the investor directly. That means the investor reports that one.

But it sounds like youa re talking HMDA, and I'm talking GFE and CC?!?!?

carp...you're right. Jumping forums and focusing on HMDA scrubbing.

Still, if the other investor denied the loan outright, I'd say that application was done. Otherwise, I agree with joker that just changing programs is not a cc.

sorry about the confusion I caused.

See, that's my point...it doesn't sound like a true denial to me...it sounds like they didn't want it for some reason...the term "rejected" is what has me wondering.