Thank you so much Dan. I appreciate it.

I am going to piggy back on this thread. Customer applies to combine first and second mortgage held by the bank. Bank counter offers to leave the first and second in place however, will modify and lower the rate on the second. Customer accepts. Is this HMDA reportable?

modifications are never HMDA reportable.

Truffle is correct. Since the counteroffer was accepted and the new "loan" is a modification, it is not reported. IF you were to replace the 1st & 2nd with a new loan, this would be reported as a "refinance".

David's back AND I got one right!!!!
On that note I'm hangin' it up for the week.

And I see my hiatus has allowed you to surpass me in posts TR! Enjoy the weekend!

Thanks! That was my thought since it became a modification, but wanted confirmation from the experts. Have a great weekend everyone!

How did the "counter-offer" provide credit on different terms?

I don't think the end modification has anything to do with the credit request to consolidate the two loans being denied. All they did is change the terms of existing credit after determining they did not want to extend a new loan.

My initial thought is they have a reportable denial.

Dan, that is exactly why I asked. The customer applied to combine the two loans in order to lower his monthly payment. It is a TDR so the bank did not want to refinance the property, and so therefore made the "counter offer" to lower the rate on the second mortgage, which then lowers the monthly payment amount. My first thought was its a counter which becomes a modification, not reportable, but then I questioned myself because it seems like we "drop" the application by not reporting it, and I could see examiners thinking as you are.

It is a TDR so the bank did not want to refinance the property,

Unless someone can convince me otherwise I'm going to have to opine you have a reportable denial.

I disagree. If I ask for A and the bank counters with B and I accept B, then I don't believe you have a reportable denial. I think this is an accepted counter-offer.

If an institution makes a counteroffer to lend on terms different from the applicant's initial request (for example, for a shorter loan maturity or in a different amount) and the applicant does not accept the counteroffer or fails to respond, the institution reports the action taken as a denial on the original terms requested by the applicant. [Commentary to §1003.4(a)(8) #1]

If the borrower has supplied… information the lender requires for a credit decision and the lender denies the application or extends a counter-offer that the borrower does not accept, use the code for "application denied". [HMDA FAQ – Action Taken]

No where in Reg B or in HMDA's Action Code definitions does it say the end modification has to look similar to what was originally accepted. The borrower made a request to lower payments. Their solution was to combine the 2 loans into 1. The bank countered with a different solution that met the needs of the borrower and they accepted it.

The bank countered with a different solution that met the needs of the borrower and they accepted it.


I don't know David. Providing a different solution does not necessarily translate to offering credit on different terms than those applied for.

The customers applied for a loan to consolidate their debt (2 mortgages). The loan request was denied.

I can see an argument both ways and that's why I offered a dissenting opinion but I'm not going to spend a lot of time debating the issue; however I still have to opine there is a reportable denial in this circumstance.

I guess what one will have to decide is a modification of an existing credit offering credit on terms different than the loan request applied for. IMO it is not, but it is an opinion and not fact.

I think that's a stretch and one I could defend.

That's not necessarily true. No where did Christine say that in her post. What we know is the bank came up with a different solution and counter-offered it. That solution was accepted. If the loan officer said "No. Can't do that. But we could do this instead" I might agree. What if the loan officer said "We can do that, but what if we did this instead?" and the customer replied "Oh. I never thought of that. Sure. That works for me."

It's good to be back debating with you Dan!