1.)Application was denied for secondary market. Customer went to a different bank and was also denied. Customer would like to pursue an in house product with us now. For this scenario would an adverse action be sent to the customer and then a new application could be started for the new product? Can we use the documentation that we already had on file as it is less than a couple of weeks old?

2.) Application was denied for secondary market and the customer has decided to go in house. This is a seamless transition. Would you send and adverse action for the denial with the counteroffer or is documentation in file sufficient? Would you have to redisclose GFE due to the product change?

For operations sake... provided you didn't send a denial once they were turned down for initial secondary market prodcut... you would be easier served to go with a counter-offer, which counts as a denial... unless they accept the counter-offer. I believe you are able to redisclose the GFE because of the product change, but only the elements of the GFE which change as a direct result of the product change.

However, if you already provided an AAN (a clear denial), you would have to, in my opinion, get a new application and start over. You can choose to use the same information but be careful of using the same credit score for FCRA issue and the same flood cert where rules my apply.

Hope that opinion helps.

Cheers!

1. You owe the guy an AAN for the 2ndary market denial. How you handle the re-application for the in-house loan would be up to your internal loan policy/procedure.

2. You owe the guy an AAN for the 2ndary market denial. Unless you gave the applicant a firm offer of credit for the in-house product before he decided to apply for that product then there was no counteroffer made. If the applicant requested the change in product it would be a changed circumstance. If the bank changed the product it would not be.

Understood...thank you both for your replies.