Skip to content
BOL Conferences
Learn More - Click Here!

New Reply Thread Options
#1939043 - 07/09/14 06:47 PM Mtg. Loan Application Amount Changed- Urgent
Anonymous
Unregistered

Small community bank that does not sell to secondary market.

Borrowers apply for a mortgage in amount of $100,000. Appraisal comes back at $80,000. Bank documents and contacts the borrower. The amount is then crossed out and/or white-out and the new amount is written on the original application. Borrowers do not submit a new application with the revised amount, nor do they initial the change on the application.

I am seeing this frequently and am not sure if this is acceptable and/or the risk that is involved? The bank does not generate a final application at closing. There is one application in the file and it is the original.

I would think that the borrower should at least initial the change on the original application.

Any advice, input, or guidance is appreciated. Thank you in advance.

Return to Top Reply Quote Quick Reply Quick Quote
#1939231 - 07/10/14 01:36 PM Re: Mtg. Loan Application Amount Changed- Urgent Anonymous
Anonymous
Unregistered

anyone?

Return to Top Reply Quote Quick Reply Quick Quote
#1939251 - 07/10/14 02:00 PM Re: Mtg. Loan Application Amount Changed- Urgent Anonymous
NotDoneYet Offline
Gold Star
NotDoneYet
Joined: Jul 2010
Posts: 482
PA
Our originators change amounts, with a line through the first amount never white-out, on the original applications and it is not initialed by anyone. We do print a final one to be signed at closing, but this is done since we sell some on the secondary market.
However, since it is normally documented somewhere in the file as to why the amount was changed, our regulator has never had an issue with it.
Last edited by NotDoneYet; 07/10/14 02:01 PM.
Return to Top Reply Quote Quick Reply Quick Quote
#1939883 - 07/11/14 04:54 PM Re: Mtg. Loan Application Amount Changed- Urgent Anonymous
Truffle Royale Offline

10K Club
Joined: Jul 2003
Posts: 17,395
First thing I'd do is walk around and collect every bottle of white-out and throw it away! No one in the mortgage area (or anywhere in business, imho) should be allowed to use it...ever!

Next, train your staff to follow the same protocol NotDoneYet's staff does when changing loan amounts.

Most importantly, your bank made a counter-offer of the original application. Was it done verbally? When and by whom should be documented in the file. Maybe writing a letter to counteroffer should be made part of your procedure so you have it all taken care of and documented at once.

Return to Top Reply Quote Quick Reply Quick Quote
Quick Reply:
HTML is disabled
UBBCode is enabled




Moderator:  MagicCity, P*Q, Truffle Royale