If we deny a subordination request

1) Do we have to send a denial to the customer (I'm thinking yes, but the reg is a little vague on this)

2) If the lender at the other bank wants to talk to us, can we talk to them about this or do we just have to leave that up to the borrower.

Thanks

A subordination request is not a request for credit, so what would trigger a denial notification? As far as talking to the other lender, why not. As long of the original loan is being refinanced for the current amount outstanding and the terms are better for the customer making the first lien more affordable, why would you deny the subordination?? You are only harming the customer and possibly forcing them into foreclosure if they can't afford the current payments and then if you are at a high LTV, you are most likely going to be out of luck.