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#1685070 - 04/03/12 01:34 PM Timing for action taken
notuntermywatch Offline
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Joined: Jun 2006
Posts: 392
MN
For the commercial area of the bank, lenders will often issue written proposals, sometimes numerous proposals if they need to match a competting bank's offer. The proposal letter indicates that application documents still need to be submitted and it is not a committment to lend. The letter is outlining what the borrower would need to bring in and the terms the bank would be willing to offer if the applicant qualifies.

If an applicant is shopping around, we could go past the 30 day timeframe before the customer actually "applies" for the loan. Is this okay per the 30 day timing requirement to notify the customer in Reg B?

I'm thinking if they pull credit before they issue the proposal this would be a problem (for various reasons), but if they truly wait to pull credit and start underwriting when they get the application documents we should be okay???

Thoughts?

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Lending Compliance
#1686008 - 04/05/12 01:41 PM Re: Timing for action taken notuntermywatch
ComplianceNerd Offline
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Joined: Nov 2011
Posts: 376
Texas ...
I think the letter that you have to your borrowers is a step in the right direction. I would suggest adding a deadline date to the "proposal" letters, therefore if your borrowers have not responded or complied by that date, you are no longer obligated to consider their application for the specific request.

Hope this helps!
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