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#1806267 - 04/18/13 09:41 PM
Clarification of Withdrawn Apps Needed
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100 Club
Joined: Nov 2005
Posts: 165
KY
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Is it considered withdrawn if an application was taken and no credit decision was made, and the applicant withdraws and does not wish to proceed? I am getting confused on the action of these loans. We essentially have a complete application but the action is different based on what I am reading for Reg B Withdrawal of Approved Application and that it notes it applies after a credit decision was made.
Different scenario from above. What if I take the completed application but the customer never returns nor a credit decision is made? Is this considered a withdrawal?
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#1806278 - 04/18/13 09:58 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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Junior Member
Joined: May 2012
Posts: 29
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For it to be available as a Withdrawal it has to expressly be withdrawn by the applicant AND be done prior to a credit decision being made.
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#1806296 - 04/18/13 11:57 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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Gold Star
Joined: Jun 2010
Posts: 350
Lost in the rain.
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If you loan application was complete why didn't you make a credit decision? Or should an NOIA have been sent?
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#1806351 - 04/19/13 01:24 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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Power Poster
Joined: Oct 2009
Posts: 9,232
OK
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While i understand it's an industry standard (and an option under HMDA), Reg. B makes no mention of "approved but not accepted".
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#1806352 - 04/19/13 01:25 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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100 Club
Joined: Nov 2005
Posts: 165
KY
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If the application is taken and it is complete, the applicant may express they no longer wish to proceed before it goes through our credit decision/approval process.
So, if I am reading correctly, the borrower can express to withdraw the application in both instances? BEFORE a credit decision has been made and AFTER a credit decision has been made and the customer does not inquire with 30 days based on what Reg B indicates for withdrawal?
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#1806372 - 04/19/13 01:47 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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100 Club
Joined: Nov 2005
Posts: 165
KY
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Ok. So I think I may be seeing the light, so help me if I am wrong.
Option 1 - Applicant completes application and withdraws prior to approval. Document file and no notice required.
Option 2 - Applicant completes application and withdraws after approval, no further action is needed. Document file and no notice required.
Option 3 - Applicant completes application but the offier notes that the application was withdrawn because "can't reach customer". In these cases, it doesn't appear a credit decision was made so this would require a notice, whether a denial or notice of incompleteness, correct?
Thanks for all the terrific feedback.
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#1806383 - 04/19/13 02:01 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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I agree with what Raitch and Kathleen said. We (HMDA reporters) tend to get hard-wired to withdrawn vs. approved not accepted, although B follows a different path.
Sounds like you got it, A.B.
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#1806482 - 04/19/13 04:10 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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100 Club
Joined: Nov 2005
Posts: 165
KY
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Kathleen B...on the instances where a credit decision has been made, what would constitute a notice of incomplete application? Would this be mainly for verification documents such as bank statements, supporting income verification, and the like?
Again, thanks for the information.
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#1806772 - 04/19/13 11:03 PM
Re: Clarification of Withdrawn Apps Needed
A.B.
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10K Club
Joined: Dec 2000
Posts: 21,293
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By "if more information is needed" I meant if the bank finds there is more info needed to make a decision - it is found to not be a complete application.
Otherwise, review the HMDA FAQs and commentary. From the FAQs:
Action Taken
Conditional approvals---customary loan-commitment or loan-closing conditions. The commentary indicates that an institution reports a "denial" if an institution approves a loan subject to underwriting conditions (other than customary loan-commitment or loan-closing conditions) and the applicant does not meet them. See comment 4(a)(8)-4. What are customary loan-commitment or loan-closing conditions? Answer: Customary loan-commitment or loan-closing conditions include clear-title requirements, acceptable property survey, acceptable title insurance binder, clear termite inspection, and, where the applicant plans to use the proceeds from the sale of one home to purchase another, a settlement statement showing adequate proceeds from the sale. See comments 2(b)-3 and 4(a)(8)-4. An applicant's failure to meet one of those conditions, or an analogous condition, causes the application to be coded "approved but not accepted." Customary loan-commitment and loan-closing conditions do not include (1) conditions that constitute a counter-offer, such as a demand for a higher down-payment; (2) underwriting conditions concerning the borrower's creditworthiness, including satisfactory debt-to-income and loan-to-value ratios; or (3) verification or confirmation, in whatever form the lender ordinarily requires, that the borrower meets underwriting conditions concerning borrower creditworthiness.
Last edited by Kathleen B; 04/20/13 03:17 AM.
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