We approved a loan subject to appraisal coming in with a value to keep LTV at 80% or lower. Applicant didn't feel property would appraise high enough, and so opted to withdraw application? WE do not have a pre-approval program.

From the HMDA FAQS

Conditional approvals---failure to satisfy creditworthiness conditions. How should a lender code "action taken" where the borrower does not satisfy conditions concerning creditworthiness?

Answer: If a credit decision has not been made and the borrower has expressly withdrawn, use the code for "application withdrawn." That code is not otherwise available. See Appendix A, I.B.1.d. If the condition involves submitting additional information about creditworthiness the lender needs to make a credit decision and the applicant has not responded to a request for the additional information in the time allowed, use the code for "file closed for incompleteness." See Appendix A, I.B.1.e. If the borrower has supplied the information the lender requires for a credit decision and the lender denies the application or extends a counter-offer that the borrower does not accept, use the code for "application denied." If the borrower has satisfied the underwriting conditions of the lender and the lender agrees to extend credit but the loan is not consummated, then use the code for "application approved but not accepted."

For example, if approval is conditioned on a satisfactory appraisal and, despite notice of the need for an appraisal, the applicant declines to obtain an appraisal or does not respond to the lender's notice, then the application should be coded "file closed for incompleteness." If, on the other hand, the applicant obtains an appraisal but the appraisal does not support the assumed loan-to-value ratio and the lender is therefore not willing to extend the loan amount sought, then the lender must use the code for "application denied."

Depends how you notified the applicant the need for an appraisal. It will either be closed for incompleteness or denied for an incomplete application.

http://www.ffiec.gov/hmda/faqreg.htm

Loan officer called the customer to discuss the need for the appraisal, and advised what amount the property would need to appraise at.

Verbal communication would not constitute a Notice of Incompleteness under 1002.9. This would be a denial for an incomplete application.

I've not seen this before.....What if we have approved a loan based on a conditioned appraisal....the appraisal is conditioned upon roof repair.....

The buyer (applicant) and seller cannot agree on the roof repair and buyer decides to back out of deal and withdraws application.....

Would this be approved not accepted or a denial based on collateral?

You approved the loan with the condition the roof be repaired.
Circumstances aside, the borrower didn't accept your approval.
I say approved but not accepted.

Thanks, Truffle!!

What if we have approved a loan based on a conditioned appraisal....the appraisal is conditioned upon roof repair.....

The buyer (applicant) and seller cannot agree on the roof repair and buyer decides to back out of deal and withdraws application.....

Would this be approved not accepted or a denial based on collateral?

Review the FAQs for Conditional Approvals.

It appears from your statement you don't have a satisfactory appraisal that will support the loan request.

Exert from the FAQs.

For example, if approval is conditioned on a satisfactory appraisal and, despite notice of the need for an appraisal, the applicant declines to obtain an appraisal or does not respond to the lender's notice, then the application should be coded "file closed for incompleteness." If, on the other hand, the applicant obtains an appraisal but the appraisal does not support the assumed loan-to-value ratio and the lender is therefore not willing to extend the loan amount sought, then the lender must use the code for "application denied."

Link to the FAQs

http://www.ffiec.gov/hmda/faqreg.htm#action

Thanks, Dan....we're reporting denied due to collateral.....

Loan conditionally approved upon a recorded maintenance agreement with a neighbor for a shared driveway...Neighbor refused to sign such an agreement......applicant withdrew.....

Would this type of conditioned approval be "analogous" to a clear title issue where we report approved not accepted....

Or is this a decline due to collateral?

How would a shared maintenance agreement affect the title? In this area a shared maintenance agreement is simply an agreement the parties sign to share the cost of any maintenance or repair to the property, it does not affect easements or title.

I don't know, Dan.

I've never seen a loan not originated because of this (Honestly, I've never seen a loan approval conditioned on this).....it is currently being reported as approved not accepted.....but I wasn't sure if it should be reported as denied due to collateral.....

I don't see it as an approved but not accepted. IMO the condition the loan officer placed on the request has nothing to do with being able to get clear title to the property.

I would be concerned from a fair lending perspective if this condition has been placed on other loan requests in similar situations.