Hello BOL World,

I am hoping some of you can share your knowledge on this topic.

Background: Our bank owns a mortgage subsidiary. I am reponsible for compliance at the bank as well as the mortgage subsidiary. One hot topic at the subsidiary is the tracking and disposition of files for adverse action purposes. The investors do not send out AA notices so we cover that side.

My question has to do with the expiration of a prequalification letter (we do not have a preapproval program). Our investors state that a credit report is only good for 90 days, so our procedure has been to mark a prequalification file as incomplete after 90 days unless credit is pulled again to verify no changes. Does anyone know of any guidance with respect to this?

As always, your assistance is appreciated.

Garret01

How long you choose to make your preqaulification good for is really up to you. You will not find any regulatory guidance on the issue.

If anyone has any opinions/best practices/ or procedures they would like to share, I would apprecaite it.

Best practices for mortgage subsidiaries is a hard topic to research.

What best practices are you looking for? I don't deal with brokers or subsidiaries but once you send the pre-qualification letter with the the conditions that have to be met and the date by which they must be completed you have satisfied your notification requirements under 1002.9. If the conditions have not been met by the stated date in the letter then you mark the file closed for incompleteness.

Thanks Dan. I was looking for similar operations out there to see what they set as their expiration date on the prequal. I'm considering extending our expiration date.

Depending on the complexity of the information we need and the type of loan transaction our letters expire anywhere from 10 to 90 days.


Our investors state that a credit report is only good for 90 days

In this case our letter would expire no more than 60 days from the date it was sent to allow us time to finalize the processing once we received the needed information.

Thank you Dan.