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#1904662 - 03/12/14 07:20 PM pre-approval programs not a request for credit?
Burgess Offline
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Joined: Jan 2004
Posts: 1,620
just received a newsletter on pulling credit.

it makes the point that on borrowers applying for Pre-Approval resulting in a conditional approval, that is not a request for credit under the act so you do not have permission to pull credit.
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#1904665 - 03/12/14 07:24 PM Re: pre-approval programs not a request for credit? Burgess
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Have you read the rules for pre-approvals vs pre-quals for mortgages? A pre-approval for a mortgage must be a full credit approval subject only to finding an acceptable property.

From HMDA (on what is a pre-approval for HMDA purposes):

Application.(1) In general. Application means an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with procedures used by a financial institution for the type of credit requested.

(2) Preapproval programs. A request for preapproval for a home purchase loan is an application under this section if the request is reviewed under a program in which the financial institution, after a comprehensive analysis of the creditworthiness of the applicant, issues a written commitment to the applicant valid for a designated period of time to extend a home purchase loan up to a specified amount. The written commitment may not be subject to conditions other than:

(i) Conditions that require the identification of a suitable property;

(ii) Conditions that require that no material change has occurred in the applicant's financial condition or creditworthiness prior to closing; and

(iii) Limited conditions that are not related to the financial condition or creditworthiness of the applicant that the lender ordinarily attaches to a traditional home mortgage application (such as certification of a clear termite inspection).
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
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#1904669 - 03/12/14 07:34 PM Re: pre-approval programs not a request for credit? Burgess
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
You need to put different loan types into different columns when discussing pre-approvals.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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