Okay, I'm on some pain med's this morning & feeling a little foggy, so I'm asking for some assistance.

Here's the scenario: Customer applies to refi his home at $x. LO approves the loan. Before the customer can close, a storm causes damage to the home and the customer decides to do a HI at the same time as the refi and "changes" his request to $x + $y.

The additional money requests exceeds our LTV limits and we cannot approve it.

So...

Is this two separate requests?
Is it one, with a "change of circumstance?"
Is it a refi?
Is it a HI?
Is it "approved, but not accepted?"
Is it a denial?

Help!

You're in Texas. If it's done as a one loan, it would be a home equity loan (cash out refi). If you're doing a mechanic's lien for the improvements, you have to establish that lien separately.

The cleanest way to do it IMO would be as two separate requests. A refi and a home improvement loan.

If considering a cash out refi, I would report the original refi request as approved but not accepted and the cash out refi (home equity loan) as a denial.

Just rambling here........anyone else?

Is any loan (even at the original amount requested) going to originate? If not, i would treat it as an amended application and a denial of a home improvement request.

I understand about the HE part, but the loan(s) is/are not being originated.

So, you're saying report as two loans:

1. refi - approved, not accepted
&
2. HI - denied

Thanks.

No, the customer wanted the whole ball of wax.

So, your recommendation is a denial of a single ("amended") loan request for HI purposes.

Anyone want to break the tie?

The way i look at it: before the loan closed, the applicant changed their mind and amended their application, making the original application on its own basically null and void. They've proven this by not accepting a loan on the original application's terms. That's why i wouldn't treat it as 2 separate requests. If they were willing to accept your terms for the original request, then they would in effect be themselves creating 2 applications: one your bank will approve and one you won't and in that case, i'd report 2 applications.

ETA: maybe you have your choice; in a very quick look at the GIR, i couldn't find anything specific to help here.

Your thoughts echo mine.

I guess, my stumbling block was the fact that the LO approved the refi PRIOR to the client changing the request.