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#1691847 - 04/24/12 02:01 PM Reg B and Adverse Action Notices
debperry Offline
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If we receive an online mortgage application for a mobile home and we don't lend on mobile homes, are we required to give the borrower an adverse action notice or can we simply contact borrower and communicate this to them? On that same line, we receive a number of online applications where the borrowers are just shopping around to different lenders and don't really intend to go with us, do we need to give them adverse action notices and, if so, for what reason?

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#1692113 - 04/24/12 07:08 PM Re: Reg B and Adverse Action Notices debperry
DoS Offline
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in terms of inquiry vs application it depends generally on how you respond. I think you could have an arguement that the online "applications" are just inquiries and not applications.

On a side note I would be careful on not providing loans on mobile homes (especially if they have a foundation). It may cause disparate impact to low income borrowers.
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#1692142 - 04/24/12 07:37 PM Re: Reg B and Adverse Action Notices debperry
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I think you could have an arguement that the online "applications" are just inquiries and not applications.

And by what section of Regulation B do you rest that opinion on?


If we receive an online mortgage application for a mobile home and we don't lend on mobile homes, are we required to give the borrower an adverse action notice

Mobile homes are not a type of credit offered, they are a type of collateral offered. You make the type of loan being applied for, residential lending, you just don't make residential loans secured by mobile homes.

On that same line, we receive a number of online applications where the borrowers are just shopping around to different lenders and don't really intend to go with us, do we need to give them adverse action notices and, if so, for what reason?

If they are shopping then how do you know they have no intentions of going with you simply from the information on the application?

If you accept Internet applications then I think you are going to be hard pressed not to treat all such applications, or any written application for that matter, as an application under Reg. B. For those that are incomplete send an AAN denying it for an incomplete application or send them the notice of incompleteness.
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#1692212 - 04/24/12 08:44 PM Re: Reg B and Adverse Action Notices Dan Persfull
swiggles Offline
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"Mobile homes are not a type of credit offered, they are a type of collateral offered. You make the type of loan being applied for, residential lending, you just don't make residential loans secured by mobile homes."

I remember learning this.....probably from Dan!!

On the adverse action notice, the reason for denial would be "value or type of collateral."
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