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#1699228 - 05/14/12 05:38 PM Adverse Action or Eliminate Application
Happy28 Offline
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Joined: Jun 2011
Posts: 16
Hi
One of our mortgage products require a 2 year minimum employment requirement for the primary borrower. An application came in with primary borrower no income, co-borrower lots of income. If we recommend the applicants reapply with the current co-borrower taking primary borrower position and they do go forward with resubmitting the application, should the first loan application be denied or eliminated?

Thanks for your input.

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#1699481 - 05/15/12 01:35 PM Re: Adverse Action or Eliminate Application Happy28
raitchjay Online
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OK
I would treat this as an amended application and go forward.
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#1699510 - 05/15/12 02:02 PM Re: Adverse Action or Eliminate Application Happy28
rlcarey Online
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Galveston, TX
Happy - So what you are saying is that two people can apply jointly for credit and totally dependent on who they choose to list first on the application will impact whether or not they get approved for the loan.

I say you have a fatal flaw in your underwriting processes which my very well sink you in your next fair lending examination.

The applicable words here are "joint applicants". There is no primary or secondary applicant when it comes to underwriting.
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#1700796 - 05/17/12 07:23 PM Re: Adverse Action or Eliminate Application rlcarey
Happy28 Offline
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Thank you for the feedback. Much appreciated.

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#1701166 - 05/18/12 04:49 PM Re: Adverse Action or Eliminate Application Happy28
Andy_Z Offline
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Agree 100% with Randy. We had one instance during a FL exam where she and he applied, but when the final app and docs were done it was he and she on the app. The examiner said we'd have had issues if that was seen more than once.

If each applicant is 100% liable, what difference does this make except for reference?
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#1701261 - 05/18/12 06:40 PM Re: Adverse Action or Eliminate Application Happy28
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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I agree with Randy and Andy totally. The applicant co-applicant is purely a reference term. Each is fully a co-applicant and will be 100% liable on the loan. It makes no difference whose name is first and will lead you down a dark scary path.
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