GMI Scenario:

Applicant misreads a GMI question and responds based on his/her initial interpretation of the question. The applicant's loan is approved and the applicant's response to the GMI question is corrected on the final application. The Bank's loan application reflects the corrections made on the final application verses the initial application.

We'd like other institutions' perspective as to how this scenario would be addressed/handled. Thoughts?

Thank you for your assistance in advance.

Who corrected the response?
You're supposed to report exactly what the applicant puts on there, whether you 'know' it's right or not.
If the borrower elects to change it, that's one thing, but no one at the bank should take it upon themselves to do so.

I agree with TR. Only borrower can change the GMI. You do not say who or why it was corrected. Did borrower say they made a mistake? If the answer is yes, then document with statement from borrower. If bank or LO changed without borrower's knowledge or permission, you need to change to borrower's response to the GMI.