Is it considered withdrawn if an application was taken and no credit decision was made, and the applicant withdraws and does not wish to proceed?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?

For it to be available as a Withdrawal it has to expressly be withdrawn by the applicant AND be done prior to a credit decision being made.

If you loan application was complete why didn't you make a credit decision? Or should an NOIA have been sent?

While i understand it's an industry standard (and an option under HMDA), Reg. B makes no mention of "approved but not accepted".

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?

Not for both. An applicant can withdraw an application prior to your credit decision, but not after. Once you make a creidt decision there is nothing to withdraw.

I think the bigger question is if you have a completed application, then why is a credit decision not being made?

A borrower can withdraw any time they wish. what the bank is required to do for Reg B and report for HMDA is separate.

If the bank has a completed application, it has 30 days to make a decision whether you hear from the borrower in that time period or not.

if the loan was approved and the applicant then withdraws, the loan was approved and no further action is needed under Reg B (except a note to file explaining what transpired). For HMDA this would be approved not accepted.

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.

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.

In option 3, officer shoud not be using term withdrawn. if application is complete - make the credit decision. Approve and if you don't hear back, close file out, or deny if that is the correct decision. If more info is needed, issue a notice of incomplete ap within 30 days or deny for incompleteness in same time frame

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.

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.