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#1799434 - 03/28/13 08:18 PM LO using old application
Ginlyn, CRCM Offline
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Ginlyn, CRCM
Joined: Nov 2003
Posts: 300
Oklahoma
Loan review brought me a copy of a Notice of Credit Decision (Adverse Action notice)reflecting a denial to a customer who wished to purchase a motorcycle. The loan officer used a credit application from March 21, 2000. A credit report was pulled citing serious delinquency, collections, etc. thereby causing the request to be denied. My question is the use of the 13 year old credit application. Everything has changed on this customer: address, employment, income, credit. Is the new credit report enough documentation of the changes for this customer?

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Lending Compliance
#1799449 - 03/28/13 08:45 PM Re: LO using old application Ginlyn, CRCM
manimal Offline
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manimal
Joined: Feb 2008
Posts: 2,207
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Most loan policies (that I have seen at least) require a fresh consumer application with every transaction. Just the application itself has important disclosure language for the applicant(s)... and I think it's safe to assume that the disclosure language has changed over the last 13 years.
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#1799454 - 03/28/13 08:48 PM Re: LO using old application Ginlyn, CRCM
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
That is crazy. There should be an application for the current request.
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#1799457 - 03/28/13 08:56 PM Re: LO using old application Ginlyn, CRCM
ahkcompliance Offline
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Joined: Sep 2008
Posts: 2,470
Midwest
I think this is just prety laziness and sloppy work. Did the borrower really request credit?

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#1799458 - 03/28/13 08:57 PM Re: LO using old application Kathleen O. Blanchard
Ginlyn, CRCM Offline
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Ginlyn, CRCM
Joined: Nov 2003
Posts: 300
Oklahoma
I agree. I found a thread from BankersOnline dated 2002 that said "As for using old applications for a new loan request, this is not prohibited -- but also not always the best of practices. If you use old applications -- usually for the convenience of the customer -- be sure to document the new loan request and update any information that has changed." Well, everything has changed except the name of the customer. Our LO is not going to like this, but I'm not here to make his life easier.

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#1799465 - 03/28/13 09:07 PM Re: LO using old application ahkcompliance
Ginlyn, CRCM Offline
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Ginlyn, CRCM
Joined: Nov 2003
Posts: 300
Oklahoma
We had given the customer credit for a used car back in 2000. That was when we received the original credit application. This time he wanted to borrow money for a motorcycle but, as I said earlier, he had a very negative credit report with a score in the low 400's. I just could not believe that our LO didn't think he needed another application after 13 years.

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#1799477 - 03/28/13 09:30 PM Re: LO using old application Ginlyn, CRCM
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
Very customer friendly!
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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